Senate Hearing, 108TH Congress - Federal Aviation Administration Reauthorization

S. HRG.
108846
FEDERAL AVIATION ADMINISTRATION

REAUTHORIZATION
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
FEBRUARY 11, 2003
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN MCCAIN, Arizona, Chairman

TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West Virginia
KAY BAILEY HUTCHISON, Texas JOHN F. KERRY, Massachusetts
OLYMPIA J. SNOWE, Maine JOHN B. BREAUX, Louisiana
SAM BROWNBACK, Kansas BYRON L. DORGAN, North Dakota
GORDON SMITH, Oregon RON WYDEN, Oregon
PETER G. FITZGERALD, Illinois BARBARA BOXER, California
JOHN ENSIGN, Nevada BILL NELSON, Florida
GEORGE ALLEN, Virginia MARIA CANTWELL, Washington
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
JEANNE BUMPUS, Republican Staff Director and General Counsel
ROBERT W. CHAMBERLIN, Republican Chief Counsel
KEVIN D. KAYES, Democratic Staff Director and Chief Counsel
GREGG ELIAS, Democratic General Counsel
(II)
CONTENTS
Page
Hearing held on February 11, 2003 ....................................................................... 1
Statement of Senator Brownback ........................................................................... 4
Statement of Senator Burns ................................................................................... 5
Prepared statement .......................................................................................... 6
Statement of Senator Inouye .................................................................................. 5
Statement of Senator Lautenberg .......................................................................... 34
Statement of Senator Lott ...................................................................................... 2
Statement of Senator McCain ................................................................................. 1
Statement of Senator Rockefeller ........................................................................... 4
WITNESSES
Blakey, Hon. Marion C., Administrator, Federal Aviation Administration ........ 7
Mead, Hon. Kenneth M., Inspector General, Department of Transportation ..... 13
APPENDIX
Kerry, Hon. John F., U.S. Senator from Massachusetts, prepared statement ... 39
Response to written questions submitted to Marion C. Blakey by:
Hon. Maria Cantwell ........................................................................................ 48
Hon. Daniel K. Inouye ...................................................................................... 49
Hon. John McCain ............................................................................................ 40
Hon. Ron Wyden ............................................................................................... 46
Response to written questions submitted by Hon. John McCain to
Hon. Kenneth M. Mead ....................................................................................... 54
(III)
REAUTHORIZATION
TUESDAY, FEBRUARY 11, 2003
U.S. SENATE,
COMMITTEE ON COMMERCE, SCIENCE,
TRANSPORTATION, AND
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m. in room SR
253, Russell Senate Office Building, Hon. John McCain, Chairman
of the Committee, presiding.
OPENING STATEMENT OF HON. JOHN MCCAIN,
U.S. SENATOR FROM ARIZONA
The CHAIRMAN. Good morning. Todays hearing is the first in a
series of reauthorization hearings on the Federal Aviation Adminis-
trations programs. The FAA accounts expire this year, and it is
this Committees intention to develop and report out a reauthoriza-
tion proposal in a timely manner. To do that, it would be preferable
for us to have the administrations reauthorization proposal in
hand. I would urge the administration to submit its reauthorization
proposal as soon as possible, which they have not done for a long
period of time. However, given the importance of this issue and the
number of other competing priorities in the Senate, we will move
forward without it if necessary.
The FAA is solely responsible for ensuring the safety and effi-
ciency of our Nations civil aviation system. The importance of the
aviation industry to our Nations economy has become all too evi-
dent in the months following the tragedy of September 11, 2001.
The industry is in a crisis that has deeply concerned this Com-
mittee. However, we must be equally concerned about the FAA and
its programs and work to ensure that our Nations aviation system
has the proper agency oversight. Our aviation system has been the
leader in safety and efficiency, and we must act this year to ensure
that this continues to be true.
The last reauthorization bill, AIR21, enacted in 2000, provided
historic funding levels for investment in our aviation system. We
have made great progress in capacity and infrastructure improve-
ments, but we must continue to make the appropriate level of fund-
ing available to ensure that infrastructure is further improved, our
safety is maintained, and the security of our aviation passengers
remain a priority.
At the same time, we must be aware of the problems our airlines
face. Without an airline industry, there is no need to reauthorize
the FAA. This reauthorization will not be an especially easy task.
There will be many competing programs for a limited amount of
(1)
2
money. Revenues going in the Aviation Trust Fund are declining.

We must make some tough decisions about funding and other
issues.
I remain committed to moving forward with the reauthorization
bill at a rapid pace. I know our new Subcommittee chair, Senator
Lott, along with Senator Rockefeller, and the continuing involve-
ment of other Members of the Committee, will make this happen,
and it is important.
I think we ought to look at this FAA reauthorization in the con-
text of two incredibly important issues, one, the crisis in the airline
industry. I met with some members of labor yesterday about how
we are going to address labor-management issues. Three airlines
are bankrupt. Some believe there will be more. That is one aspect
of this issue that directly affects the FAA, and the other is the
FAAs interface with the TSA. I am not sure we have sorted that
out yet, and I would be very interested in hearing Mr. Mead or Ms.
Blakeys comments on that.
We had a hearing last week on the TSA, and Mr. Mead informed
us, no one else did, that there is a $3.5 billion shortfall between
revenues and expenses just for the TSA. Where is money coming
out of? The Aviation Improvement Program. I do not think Ms.
Blakey thinks that is a good idea, do you, Ms. Blakey?
Ms. BLAKEY. No.
The CHAIRMAN. So we have some very, very serious issues to ad-
dress as part of this reauthorization, and by the way, on this issue
of funding, I do not know how you lay another tax on an airline
ticket. I do not know how you take more money out of AIP, which
leaves general revenue, but that will be, I think, part of the discus-
sion we have with the witnesses.
I want to thank the witnesses for being here today, and I want
to recognize Senator Lott, the distinguished Subcommittee Chair-
man, and then Senator Rockefeller.
STATEMENT OF HON. TRENT LOTT,

U.S. SENATOR FROM MISSISSIPPI
Senator LOTT. Thank you, Mr. Chairman. I congratulate you for
having this early hearing and for your commitment to moving the
FAA reauthorization bill this year. I had some meetings this past
weekend with our counterparts on the other side of the Capitol,
and they indicate that they plan to work aggressively on this issue
also and to have legislation ready in the House before Memorial
Day, so that is a positive sign, because at an earlier point, there
had been some indication maybe they were going to put the high-
way bill ahead of this bill, and now it looks like that may not be
the case, and I think that is the right thing to do.
I would like to welcome todays witnesses and thank them for ap-
pearing before the Committee, and thank them for the job they do.
I am especially looking forward to hearing the proposals for the
FAA reauthorization from a fellow Mississippians viewpoint. The
administrator is originally from Tupelo, Mississippi, or at least she
grew up there, and I have been very impressed with the job she
has done, but that is what I expected from her with that back-
ground.
3
Mr. Mead, also I must say that I enjoyed your testimony last
week, and I have told others how impressed I was with the job you
do in your role as the IG. You not only give a very close look at
programs and problems, you are honest about it, but you also try
to suggest ways that maybe we could deal with it, and boy, we
need more of that, so I am looking forward to hearing from you
today.
As Chairman of the Aviation Subcommittee for this Congress,
one of my first priorities has been to meet with all segments of the
aviation industry. Senator Rockefeller has been doing that over the
years and, of course Senator McCain, to make sure we understand
everybodys viewpoint and explore new ideas of how we can be
helpful to this very important part of Americas economy.
When I took the Chairmanship of this Subcommittee a good
friend said, why did you do that, they are having all kinds of prob-
lems, and I said, that is why, because I think this is too important
a segment of our economy to ignore the problems and not try to see
if there is something Congress can do.
A lot of the problems are going to have to be dealt with by the
industry, but this year is especially important, with security risks,
security costs, what we are going to do with regard to the impact
on the industry if there is a war that goes forward in Iraq, how
that would further affect the industry and, of course, the FAA re-
authorization, which is very important legislation.
I remember when we passed it last time it was not easy, and a
lot of give-and-take between this Committee and its leadership and
the appropriators in the Senate and the House. I hope maybe this
time it actually will not be quite that difficult, but it will take a
lot of work to get it done.
We plan to have several hearings. I have talked to Senator
McCain about other hearings we think will be necessary. I am
going to be visiting with Senator Rockefeller some more about his
view of how we can develop the legislation working with our Chair-
man and full Committee and Ranking Member.
In the immediate aftermath of 9/11, I think the Congress acted
incredibly responsible in trying to step up to the challenges that
aviation security was having, and the industry was having. Now
we need to go take a look at what we can do to help stabilize the
industry, look at the burdens we are putting on them, look at what
the future should be, what is the vision for aviation for the next
10 or 20 years. I do not think we do enough of that kind of think-
ing, and I enjoyed having a chance to talk with the administrator
about that.
We do need to look at ways to enhance safety, security, effi-
ciency, and competition. I am particularly interested in the air traf-
fic control systems, and the use of airport improvement programs.
We put lots of money into the air traffic control system, billions,
and yet, it still is not where we would like it to be, and I think
we are going to have to make sure that we have the capacity in
the future, when more demands do come along. We need to mod-
ernize the system and, obviously, it can be done.
We also have to pay attention to the impact we have had on air-
ports in terms of lost AIP funds, additional security demands, and
what are their responsibilities and our responsibilities.
4
This is going to be a bipartisan effort because this is something

our people deserve, they expect us to approach it that way, and be-
side that, it is one of the few areas that Senators legislate on that
we have to actually endure the consequences, and so we will be try-
ing very hard to do the right thing, and to be helpful and construc-
tive as this legislation is developed.
Thank you, Mr. Chairman.
The CHAIRMAN. Senator Rockefeller.
STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
Senator ROCKEFELLER. Thank you, Mr. Chairman. I will be brief.
I agree with everything that Senator Lott said, and I do think that
the Airport Improvement Program is sacred, especially if you come
from Mississippi, West Virginia, Montana or Kansas, I do not know
about Arizona and Hawaii. You guys are kind of big, but to us it
is everything. It is everything.
We have got to look at our rural airports. We have got to make
sure the Trust Fund does not get vitiated. We have seen that hap-
pen so often. I think we have done the right thing since 9/11, but
having said that, we still have a lot more to do in terms of aviation
security. That is the linkage with TSA that Chairman McCain
mentioned.
But I agree with what has been said about both of you. I think
over the years, Mr. Mead, you have really proven yourself a stal-
wart. We have a lot of work to do, and thank you.
The CHAIRMAN. Senator Brownback.
STATEMENT OF HON. SAM BROWNBACK,
U.S. SENATOR FROM KANSAS
Senator BROWNBACK. Thank you, Mr. Chairman, and thanks for
holding the hearing. Welcome, administrator. Thanks for coming to
Wichita recently and touring the industry there. It is an important
sector, and it is important we do the reauthorization.
I just want to call your attention to one issue. It is a narrow
issue, and other people have talked about the bigger-frame issues,
which I agree with, but one that I am concerned about from my
home State and for the Central Region is a recent analysis on the
nonprimary entitlement programs within general aviation. This is
an analysis looking at the Central Region, it looked at my State as
well as the whole country. In FAAs Central Region, which includes
Kansas, only 28 percent of the nonprimary airports would receive
the annual maximum entitlement compared to a regional average
of 66 percent.
Twenty-eight percent for the Central Region, 66 percent for a
normal region, and then looking at my State revealed that only 45
percent of Kansas nonprimary airports would be eligible to receive
the annual maximum entitlement of $150,000 compared to 70 per-
cent Nationwide, so 45 percent in my State, normally 70 percent.
I am concerned that we are not receiving the national average.
I know it is a narrow issue for your consideration. We need to
look at the broader issues as well, but it is a big concern to my
State, which is a State that is heavily dependent upon general
aviation. It is heavily dependent on these nonprimary airports for
5
industry, for the building of the aircraft, and the use of them as
well. I would hope that you could at some point in time take a look
at that.
I look forward to your thoughts and comments about what we
can do for the state of the airline industry overall, that is obviously
in a great deal of difficulty. Thanks for being here.
The CHAIRMAN. Senator Inouye.
STATEMENT OF HON. DANIEL K. INOUYE,

U.S. SENATOR FROM HAWAII
Senator INOUYE. Thank you very much, Mr. Chairman. I am here
to thank Administrator Blakey and the FAA for the very consid-
erate and sensitive way you and the FAA responded to the special
needs of the State of Hawaii. As you are well aware, over 95 per-
cent of the people who travel to and from Hawaii do so by air, and
we are hostages to tourism. That is our major industry, and the
airlines play a major role in that. If it were not for the sensitive
and considerate way you have responded, I think we would be
bankrupt today, so I want to thank you personally.
Thank you very much.
The CHAIRMAN. Senator Burns.
STATEMENT OF HON. CONRAD BURNS,

U.S. SENATOR FROM MONTANA
Senator BURNS. Thank you, Mr. Chairman. I will put my state-
ment in the record. I just want to bring up a couple of points this
morning that we have heard, and a lot of concerns out of general
aviation, and with regard to the working relationship with TSA,
and maybe some rulemaking going on down there that is sort of
out of the loop, so to speak, or out of the box. We are concerned
about some of that in the name of homeland security, and I think
it goes back to the way we actually built the foundation of this
building, we left out a couple of gaps.
The Federal Government, I guess, has mandated the expansion
of the Air Marshal Program, which is doomed to fail. I wish we
would just do away with the Air Marshal Program right now. We
have authorized pilots to be armed in the cockpit. Now we have got
a bureaucracy that is putting them through hoops that should not
be even talked about, but I will tell you, in the sense of security,
why in the world do we allow our pilots to arm themselves and to
secure the flight deck, and then put a weapon back in the cabin?
That makes no sense at all.
We do not even build jails anymore where the guards are armed
inside the turnkey of the hardest criminals, and when you do that,
you changeand I know, if you have got another hijacking, I know
the first guy that is going to get jumped on. That is going to be
that Air Marshal, and the weapon gets in the wrong hands, and
that changes the landscape and the dynamics of that operation
quite a bit.
So I am not near thewhen you did not have any other security
on there, maybe it had merit, but I think that merit is gone, and
actually is a detriment to our security right now, as far as oper-
ation of an airplane in the air.
6
And I am kind of concerned about this rulemaking in a sense, be-

cause you know, everybody says public service is great, but the bu-
reaucracy has forgotten that it is service to our citizens. We have
got to stop putting people out of business that have been in oper-
ation a long, long time, and understand their business very well,
and we are just not communicating, and that is something that you
inherited, and I know you are not going to change that overnight,
but I just want you to know that we are aware of it here in Con-
gress, and I think we have to take some common sense steps as
far as security is concerned, and I think we can do that.
And the Chairman is exactly right. I do not see how we can put
another tax on an airline ticket, but there is some inaccuracy there,
but notdo not get me started on airline fares, because I was a
little upset last week. I can fly round-trip from here to San Fran-
cisco three times for what it cost me to fly once round-trip to Mon-
tana, so we are subsidizing the competitive routes, and that is of
great concern to me.
So thank you, Mr. Chairman, for this hearing. I look forward to
the testimony.
[The prepared statement of Senator Burns follows:]
PREPARED STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR FROM MONTANA

Thank you Mr. Chairman for calling this important hearing regarding the Reau-
thorization of and the current state of the Federal Aviation Administration.
I am pleased to be here this morning to discuss FAA Reauthorization and the
plans that the administration has for aviation as well as transportation security.
Over the course of the past year and half we have witnessed many changes in our
national aviation system. While I believe we have made great strides in security I
also believe we have some questions that need answered.
I think it is important that we carefully consider all of the changes forced on avia-
tion both users and consumers in the name of security. Over the past year and a
half the Federal government has asked consumers to dramatically change their hab-
its on aircraft and in the airport. Some have accepted the so-called hassle factor as
a cost of travel while many have not.
In some cases, the Federal Government has grounded general aviation users from
flying at the cost of jobs and businesses. Over the past year and a half the Federal
Government has grounded general aviation businesses on several occasions. Some
of my colleagues believe we need to continue to do so in the name of security. Con-
gress needs to get out of the business of putting people out of business.
The Federal Government has asked the airports to forego badly needed AIP fund-
ing in order to pay for federally mandated security costs while significantly impair-
ing their ability to ensure revenue streams. Although many of the airports have ac-
cepted these costs, they have done so at their own expense. We need to find ways
to stretch taxpayer dollars by further streamlining the environmental assessment
process.
The Federal Government has mandated the expansion of an air marshal program
that is, according to media reports, failing miserably. Consequently, Congress has
deterred violence on commercial passenger aircraft by allowing pilots to carry weap-
ons on the flight deck but did not foresee the bureaucratic hurdles of implementa-
tion.
I am concerned that the voice of Congress is being shrugged off by some in the
Administration who believe they know what is better for the people of this country.
I would like to invite those individuals out to my state to explain a more secure
country is directly related to job loss and the end of family owned businesses.
This should be the root of our efforts as we enter this reauthorization process.
I realize the FAA is not responsible for the actions of TSA and Dept. of Homeland
Security but I would like to see accountability on behalf of the people who are now
unemployed or whose business has been forced out of the economy.
Finally, I would like to stress how important general and commercial aviation is
to rural America and states like Montana. Considering our long distances, sparsely
populated areas, and erratic climate, we are more dependent on aviation than most.
7
I think it is very important that we ensure the future of regional airlines and the
Essential Air Service program. Policies that attack transportation in rural states at-
tack our economy, access to health care and standard of living.
During the negotiation on the reauthorization bill, we cannot, and should not,
allow a one-size fits all standard on rural states. There are many issues that will
need to be addressed this year and I look forward to working with my colleagues
on this bill.
The CHAIRMAN. Thank you very much, Senator Burns. The prob-
lem that you cite obviously is exacerbated if we have major airlines
go out of business.
Anyway, Ms. Blakey, we would like to begin with you. Thank you
for appearing before the Committee today, and we look forward to
listening to your testimony, and you will need to pull the micro-
phone over in front of you.
STATEMENT OF HON. MARION C. BLAKEY, ADMINISTRATOR,
Ms. BLAKEY. I do want to say thank you, and good morning,
Chairman McCain, Members of the Committee. It is a pleasure to
appear before you today for the first time as the Federal Aviation
Administrator, and before I begin, I do want to acknowledge the
new Chairman of the Aviation Subcommittee from the great State
of Mississippi, Senator Lott. Thank you very much.
The CHAIRMAN. He needed that, Ms. Blakey.
[Laughter.]
Ms. BLAKEY. Us Mississippians do stick together, I have to
admit, but I also want to thank this Committee, as a broader mat-
ter, for the speedy confirmation I received this fall. I was obviously
in a big rush to get to this relaxing job I am currently in, but I
very much appreciated the quick action on that. Thank you.
It is an honor to be here at the helm of this agency that has such
a vital and a dynamic mission. Over the past 5 months, and that
is all it has been, that I have been in this job, I have to tell you
I have witnessed not only the energy and dedication of the staff,
but the really formidable technical expertise of the employees of
the FAA, who work every single day to ensure and strengthen the
safety of the system. It is an agency, I believe, with truly excep-
tional talent, and I am very proud to represent them here today.
This year, we will work together to reauthorize the FAAs pro-
grams. The administration is currently coordinating a reauthoriza-
tion proposal, as Chairman McCain noted, and I do believe it will
serve as a strong foundation for the development of reauthorization
legislation. I am looking forward to sharing that proposal with you
as soon as I possibly can.
It is a proposal that really has a fundamental underlying theme.
It is one that has been developed by Secretary Mineta: safer, sim-
pler, smarter. This concise statement underscores the U.S. Depart-
ment of Transportation these days, because we put a premium on
performance, on flexibility, and on accountability to deliver results,
and at the FAA, we are going to do our part to deliver that vision
as a part of reauthorization.
Now, to be successful, I must tell you I believe we have to build
on AIR21. Your hard work on this statute resulted in important
innovations in safety, and the environment, and it significantly in-
creased the levels of funding that we have available. Now, in my
8
view, is not the time to stray from this course. What we need to
do is build on that important legislation.
Chairman McCain already articulated, as others did here, the se-
rious state of the airline industry. We know what is happening to
the revenues there. We know what is happening to our Trust Fund
as a result. This is the time for continuity, and for stability, which
is what AIR21 provided us. There are refinements that are need-
ed, and you will see those reflected in our proposed legislation, but
the decision you made 3 years ago, were sound, and we believe we
should rely on them.
Understandably, the focus on this Committee, the Congress, and
the country as a whole has been on security for the last 16 months.
The results of your collective work, along with the TSA, have been
formidable. Those results speak for themselvesfederalizing all
baggage screeners, ensuring all checked luggage is screened, and
augmenting security on the aircraft. Your efforts have without a
doubt made aviation much more secure.
The FAA did play an integral role in this. We contributed people,
and resources to assist the new agency at its start-up, and during
that same period, maintained our focus on safety. We continue to
work closely now with the TSA to guarantee that safety programs
are interrelated and well-coordinated with the security programs
without policy contradictions, and without requirements that over-
lap.
We also are working on a series of ongoing crisis management
exercises to test this working relationship, and to clarify our indi-
vidual responsibilities during all sorts of emergency situations.
Every day, we at the FAA help to ensure the safety of an airline
industry that is in serious economic peril. I know we all agree, at
the same time, safety cannot be shortchanged, no matter how
tough the economic circumstances are.
Just recently, I met with the FAA managers overseeing US Air-
ways and United Airlines, as well as with the senior safety man-
agers of those carriers. We met together to determine where we
were on employee training, internal airway oversight mechanisms,
and our own stepped-up inspection program internal to the FAA
supporting those airlines.
I am happy to tell you that those programs are adequately sup-
ported. In fact, I can report that both airlines fully maintained
their commitment to safety, even as, unfortunately, they are reduc-
ing other parts of their operation, and the FAA will continue its in-
creased oversight there as well.
At the same time, the FAA has got to continue to improve safety
for the entire aviation industryand I stress the word, improve. By
becoming a more data-driven, more performance-based organiza-
tion, the FAA will be better able to prevent future accidents by
using data to detect problems in advance, by looking at disturbing
trends. An approach based on measurable facts allows us to iden-
tify hazards, analyze and assess risks in advance, prioritize ac-
tions, and measure and document results.
This approach, of course, places a premium on information-gath-
ering and -sharing, and that is why the FAA is committed to pro-
grams like the Flight Operation Quality Assurance Program, or
FOQA, as it is known, where airlines gather and analyze oper-
9
ational data directly from the flight data recorders on an ongoing

basis. We are also committed to the Aviation Safety Action Pro-
gram, where we get confidential reporting of safety information.
As you now, AIR21 made an important contribution with the
provision on FOQA that has greatly assisted the data-collection ef-
fort, and I am glad to tell you that that is going smoothly and in-
creasing as we speak. Thanks for your support on that.
In addition, data analysis plays an important role in the overall
Safer Skies initiative we have. As you know, the goal of Safer Skies
is to reduce the accident rate by 80 percent by 2007. Let us not
take that goal for granted. We are working very hard to achieve it.
It is a tough goal, but I can also tell you we are on track.
While our commitment to safety is paramount, we also must re-
main committed to expanding capacity, as many of you noted here
today already, throughout the system. Although the devastating ef-
fects of September 11 continue to impact the number of people who
fly in this country, recovery of traffic is inevitable. I think we all
agree on that, and now is the time, during this temporary down-
turn in air traffic, to focus on increasing airport capacity.
Both the Presidents Executive Order on Environmental Stream-
lining and the $3.4 billion investment included in the Presidents
2004 budget for the AIP programand this is a number that, of
course, is consistent with AIR21 funding levels as welldem-
onstrate the administrations commitment to expanding capacity.
I am very fond of a saying that the Aircraft Owners and Pilots
Association uses, a mile of road will get you a mile, a mile of run-
way will get you anywhere, and I think we need to really stress
that as we are talking to folks about why airport capacity is so tre-
mendously important.
With the current downturn, we have a unique opportunity to in-
crease capacity before it returns to the pre-9/11 levels. Increasing
the capacity can basically be accomplished in three ways. We have
new technologies, new procedures, and new pavement. We need all
three, and we have got to invest wisely in a way that is fiscally
sound, and is consistent with projected traffic forecasts and that
we, at the same time, know that the three can maximize each
other.
I think we really have to be committed to avoiding the nightmare
delays that we experienced in the summer of 2000. We all remem-
ber those days too well, and we have to commit ourselves to avoid-
ing that.
And I have to tell you, I feel very strongly our work cannot stop
at our own borders. Aviation is a vital engine of economic well-
being for people everywhere. It is a driving force for thousands of
businesses and industries not only abroad, but here in an inter-
related, international system.
At first, we may think of many of those as having no relationship
to aviation but, in fact, they do. It is an enormous economic driver.
I therefore want to stress my commitment to strengthening the
FAAs role in international aviation. We have to significantly step
up our global leadership, technology, aviation standards, and last
but not least, in raising the safety bar throughout the world. There
are some significant issues out there on that front, and we have to
address them.
10
Finally, while the FAA is often focused on making improvements

in the system and around the world, the FAA has got to look at
the way we ourselves do business. We are committed to improving
our cost accounting process and becoming a performance-based or-
ganization. Currently, the FAA has implemented cost accounting in
two lines of business and several support organizations but, while
we currently track 80 percent of our costs on a monthly basis, we
still have a lot of work to do.
We plan to implement the program in the remaining three lines
of business this year, but there has been slippage on a new finan-
cial system which is called DELPHI. It is a Department-wide sys-
tem, and that is pushing some things back. This year, we will focus
on implementing DELPHI and converting the cost accounting sys-
tem to work effectively with DELPHI, and then, the next year,
2004, we are going to resume bringing on line the remaining three
lines of business so that we can manage all of our costs effectively.
The FAA has also worked hard, I have to tell you, to implement
performance-based pay system, a system that links organizational
goals and individual staff performance at every level, and demands
accountability. There is a lot more, again, that remains to be done
there, and we are working every day to bring more of our workforce
into this system, because we believe it is truly a foundation for be-
coming a genuinely performance-based organization.
Now, in closing, I have to simply note on a good news point that
this year marks the centennial, of course, of the historic Wright
Brothers flight at Kitty Hawk in 1903. When you look back on
those early days of aviation and at how truly dangerous aviation
and air travel was at that point, I think there is a tendency this
year to pat ourselves on the back, and a little back-patting would
not be a bad thing in the current climate, but I have to say at the
same time, while we marvel at everything that has been accom-
plished this last 100 years, complacency has no place in aviation.
Along with your help, we at the FAA look forward to charting an
even safer, a more dynamic next 100 years in aviation.
I look forward to your questions.
[The prepared statement of Ms. Blakey follows:]
PREPARED STATEMENT OF HON. MARION C. BLAKEY, ADMINISTRATOR,
Chairman McCain, Senator Hollings, Members of the Committee, thank you for
the opportunity to appear before you today to discuss the state of the Federal Avia-
tion Administration (FAA). Before we begin I would like to acknowledge the new
Chairman of the Aviation Subcommittee, Senator Lott, from the great state of Mis-
sissippi. I look forward to working with him as well as the other Members of this
Committee during my tenure as Administrator. I would also like to take a moment
to thank the Members of the Committee for acting so expeditiously to confirm me
as Administrator last year. I very much appreciate your vote of confidence and
pledge to work hard to meet the demands of this challenging job.
As we are all aware, the FAAs programs will be reauthorized this year, so this
hearing is well timed to establish a baseline for that discussion. The Administration
is preparing a reauthorization proposal that, I think, will serve as an excellent basis
for the development of reauthorization legislation.
As we consider reauthorization, one of the most pressing challenges we face is the
dire economic condition of the airline industry. Although several low-fare airlines
have remained profitable during this difficult time, two of our major carriers are in
bankruptcy and most of the others continue to incur financial losses. This Com-
mittee recognized the importance of this situation by holding your first hearing of
the 108th Congress on this issue. Your concern supports the fact that the airline
11
industry, as we all know, is critical to the overall economic growth of this country.
While FAA has no authority over economic matters, it is critical to the FAA that
the desperate economic condition of some airlines in no way be permitted to com-
promise safety. It should also be noted that the downturn in air travel has de-
creased the amount of revenue being contributed to the Airport/Airway Trust Fund
at a time when FAA faces continued demands with respect to both safety and capac-
ity.
First, as always, let me address safety. Under the superb leadership of Secretary
Mineta, the Departments emphasis on safety has never been greater. As a modal
Administrator within the Department, I consider myself to be, first and foremost,
a safety advocate. Last year was one of the safest everno accidents of scheduled
flights. While that record ended with the tragic accident in Charlotte earlier this
year, the accident just served to emphasize that our focus on safety and preventing
accidents cannot be affected by balance sheets. Im sure my friends in the airlines
would be the first to agree, cost cutting by the airline industry cannot apply to safe-
ty.
I have personally met with the FAA managers overseeing US Airways and United
Airlines to satisfy myself that we have appropriately expanded our review of these
carriers. The approach we are taking with these carriers is to focus our safety over-
sight on areas that may be more at risk during a financial crisis. For example, we
want to ensure that employee training and internal oversight mechanisms are ade-
quately supported. Any cuts by the airlines in these areas could signal a funda-
mental crack in the safety foundation of the airline that would require immediate
FAA action. We are prepared to step in on a moments notice if we have evidence
of a deterioration of safety. To date, I am happy to report that we have seen both
airlines maintain their commitment to safety analysis and audits even as they re-
duce other parts of their operation.
With respect to FAAs oversight of the industry as a whole, our challenge is to
maximize our inspector workforce to make the most of our resources to ensure that
unacceptable compromises are not being made by the airlines. We redirect our sur-
veillance resources to areas of concern that have been identified through an analysis
of our inspectors observations, industry data bases and consideration of the airlines
overall financial and management condition. This is a proactive approach to make
sure that airlines have safety built into their operating systems and also ensure
compliance with safety regulations that will improve upon our excellent safety
record.
One of the things about which I feel very strongly, is that meaningful safety im-
provement will only be attained if we focus our efforts on making FAA a data driv-
en, performance based organization. Our safe system can become even safer if FAA
can get in front of accidents by using data to detect problems and disturbing trends.
In our system safety approach we are identifying hazards, assessing and analyzing
risks, prioritizing actions, and measuring and documenting results. This is a contin-
uous, data driven approach that places an emphasis on information gathering and
sharing. We need as much data as possible to make informed decisions, which is
why FAA is committed to programs like the Flight Operational Quality Assurance
(FOQA) and Aviation Safety Action Program (ASAP). AIR21 contained a provision
on FOQA that has greatly assisted us in our data collection efforts. Data analysis
plays an important part in our Safer Skies initiative, which is all about taking ac-
tions that will achieve the greatest benefits in preventing accidents. When we start-
ed this initiative several years ago, the goal was to reduce the accident rate by 80
percent by 2007 and we are on track to do that.
One way we are keeping on track is by establishing agency goals each year that
we hold ourselves accountable to meeting. These goals represent the initiatives we
at FAA believe will do the most to improve safety, capacity and efficiency. Last year,
FAA met nine of the ten goals set. Our on-time flight arrival rates were up. Our
equipment-related delays were down. There were fewer accidents and fewer serious
runway incursions. The transition of FAAs former security programs to the Trans-
portation Security Administration (TSA) was a smooth one. The one area where
FAA failed to meet the goal we set was in the area of operational errors. Even
though we were successful in reducing the overall number of errors by 11 percent
last year, we did not reduce the most serious category of errors and that is what
we must focus on this year. We hope to do that through increased management at-
tention, improved communications, and additional training. As of February 1, I am
happy to report that we have reduced overall errors by 11 percent and the most se-
rious category of errors by 12 percent. I am currently working to establish the stra-
tegic goals for my term.
Safety is a day in, day out commitment. By setting goals, staying focused and
holding ourselves accountable, we will demonstrate our commitment to safety.
12
I want to note that, with respect to the transition of FAAs former security func-
tions to the TSA, FAA will continue to work closely with TSA even as TSA becomes
part of the Department of Homeland Security. Although FAAs role with respect to
security has changed, we remain defenders of the Homeland in a very real sense.
Security remains a vital component of safety and we will continue to work closely
with TSA in this critical area.
While our commitment to safety is extraordinarily important, we must also re-
main committed to expanding airport capacity. Although the devastating events of
September 11th continue to impact the number of people flying in this country, re-
covery of the system is inevitable. The temporary down turn in air travel affords
us with a great opportunity to continue to focus on increasing airport capacity with-
out unacceptable disruption to the system. In response to the costly, frustrating and
totally unacceptable delays that plagued the system in the summers of 1999 and
2000, the FAA made needed changes, such as identifying and addressing choke
points in the system, and developing and refining regular communications between
the airlines and the FAA command center to deal with daily problems in the system.
One of the studies FAA conducted revealed a number of airports with capacity
constraints that impacted the national airspace system (NAS) as a whole. FAA has
a real and important role to play in addressing the problems at these airports and
other airports throughout the country. The Administrations commitment to remain
focused and take advantage of this temporary reduction in air traffic to expand ca-
pacity is evidenced by both the Presidents Executive Order on environmental
streamlining and the $3.4 billion investment included in the Presidents 2004 budg-
et for the Airport Improvement Program (AIP), a number consistent with the fund-
ing in AIR21.
The Presidents Executive Order (EO) recognizes that needed capacity projects are
essential to the well-being of the American people and a strong economy, but have
too often been unnecessarily delayed by inefficient review processes. The EO estab-
lished a high-level interagency Task Force chaired by the Secretary of Transpor-
tation to expedite reviews for designated high-priority projects and to recommend
ways to streamline and simplify reviews for transportation projects in general, con-
sistent with the nations commitment to environmental stewardship.
In challenging fiscal times, the Presidents commitment to the AIP program is an-
other example that he wants our focus on expanded airport capacity to continue
unabated. The importance of investment in airport infrastructure goes beyond alle-
viating a congestion problem at a specific location. It can provide relief to the entire
NAS. The economy relies on aviation to move people and products, and aviation re-
lies on an efficient NAS to accommodate the capacity demands placed upon it. We
must work togetherCongress, federal, state and local governments, and industry
stakeholdersto use this downturn in travel to prepare for the inevitable return of
air traffic better situated to avoid the nightmares of past summers. We must em-
brace our role as architects of the future and support the infrastructure necessary
to meet the needs of future generations.
In order to ensure that FAA moves forward in all these areas, one of my top prior-
ities is to provide consistency and predictability to the way FAA works with indus-
try. I do not want any variations in FAA policy or practice in the regions or field
offices. I want our industry partners in the United States and around the world to
know what they can expect and count on when dealing with the FAA.
I also want to increase FAAs international profile. Aviation safety should be one
of our most important exports. FAA is broadening our network of partnerships with
civil aviation authorities, as well as promoting our relationships with regional safety
organizations. We are in a position to be very helpful in providing technical assist-
ance to those countries that want to improve aviation safety oversight or air traffic
control services. We must also guard our position as a world leader in aviation safe-
ty, air traffic, and environmental issues. The world is getting ever smaller and if
FAA can help improve safe air travel for U.S. citizens and citizens of the world no
matter where they travel, we should embrace that role. Just as past pioneers ex-
panded the worlds horizons, I want FAA to be a pioneer in transportation and im-
prove aviation around the world.
Finally, in the five months I have served as Administrator, it has become appar-
ent that FAAs operational costs must be brought under control. Since any future
growth must be manageable, our decisions must be made in an informed manner.
Just as our safety decisions should be driven by data, so should our management
decisions be driven by cost data. Consequently, we must push forward our efforts
to set up our new financial system, DELPHI, and complete the implementation of
our Cost Accounting System (CAS) and Labor Distribution Reporting (LDR) initia-
tive. We will use this information to improve the decisions we make. Recently, the
Departments Inspector General, Ken Mead, pointed out that we have additional
13
work to do on internal controls related to the system we use to capture labor costs.
I am committed to make these changes, and to additional enhancements that may
be required in the future to assure the integrity of our cost information.
Mr. Chairman, I want the FAA to become, not a performance-based agency, but
THE performance-based agency; one by which other agencies will be measured. We
will start with the Air Traffic Organization and then work our way through the rest
of the agency. The Air Traffic Services Subcommittee of the Management Advisory
Council has embraced a formal set of eight performance metrics that will be re-
viewed on a quarterly basis at their meetings. This evaluation will enable the Sub-
committee to measure the effectiveness and efficiency of the air traffic services pro-
vided to our customers. The Subcommittee has been extremely helpful by using
their business acumen to provide advice on how best to serve our customers, while
retaining business-like efficiencies.
In conclusion, this year marks the centennial of the Wright Brothers historic
flight at Kitty Hawk. The flight was marked in feet, not miles or time zones, yet
it is hard to measure the impact of that moment on the way the world has evolved
since that momentous day. When you look back on those early days of aviation and
how dangerous air travel was compared with other modes of transportation and
compare them with today when aviation is the safest way to travel, it is easy to
pat ourselves on the back and feel content with how far weve come. While we can
and should marvel at all that we and our forbearers have accomplished in the past
100 years, complacency has no place in aviation. We must continue to set and work
to achieve goals with respect to safety, capacity and efficiency. I want to know that
I was part of the unimaginable advancements in aviation that will take place in the
next 100 years and I want you to know that I stand ready to work with you to take
those first steps in the second century of flight to make our world a better place.
This concludes my prepared statement. I am happy to answer your questions at
this time.
The CHAIRMAN. Thank you, Administrator Blakey.

Mr. Mead.
STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR

GENERAL, DEPARTMENT OF TRANSPORTATION
Mr. MEAD. Thank you, Mr. Chairman. I appreciate the oppor-
tunity to testify today on the FAA. I know it is not the subject of
this hearing, but there are numerous other issues, like service to
small and medium-sized communities I know the Committee will
be tackling as well.
I want to start off by saying I look forward to working with Ad-
ministrator Blakey, who I am certain is going to be a fine adminis-
trator, particularly with her NTSB safety background. It is worth
noting that, like former Administrator Garvey, Ms. Blakey is start-
ing off on a 5-year term, which will bring stability and leadership.
Before this reform, the average tenure of the FAA Administrator
was about 18 months and sometimes, frankly, it showed in the
agencys performance.
In my prepared statement, I go through a number of items that
I consider, to be very significant achievements over the past 5
years, and I think there is a linkage there between the stability of
leadership, of having one person at the helm for a period of time,
more than 18 months, and those achievements, but at this hearing,
we are here to consider the FAA of today and the pending reau-
thorization.
As we see it, there are four central issues. The first is making
FAA a performance-based organization by controlling the costs of
its operations and cost growth in major acquisitions.
Second is building aviation system capacity now to prevent a re-
peat of the gridlock conditions experienced in the summer of 2000.
14
Third is striking the balance on how airport funds will be used

for the needs of aviation system capacity and safety, and how they
will be used to fund security.
And finally, is aviation safety.
I will take each one of these in turn.
Performance-based organization, a very perplexing issue here. In
1996, Congress exempted FAA from most personnel and acquisition
rules so that FAA would operate more like a business. That is,
services would be provided to users cost-effectively, major acquisi-
tions would be delivered on time and within budget.
FAA was also directed, by this Committee, in fact, to establish
a cost accounting system so that they would know where their
money was being spent right down to the facility level. In AIR21,
Congress took some additional steps to make FAA more business-
likeamong them were reorganizing FAAs air traffic control man-
agement structure and establishing a chief operating officer posi-
tion.
Well, it is 6 years later and we do not see sufficient progress to-
wards FAA becoming a performance-based organization. The
growth in FAAs budget has gone from about $8 billion in 1996 to
$14 billion today. That is an increase of nearly $6 billion. Only
about one-third of that increase went to higher authorized amounts
for airport funding.
During that same period, we have seen inordinately large in-
creases in workforce costs, as well as significant cost growth and
schedule slips in major acquisitions. Continued cost growth of this
magnitude is simply not sustainable, given the multibillion-dollar
declines in projected Aviation Trust Fund receipts.
A frame of reference: the Trust Fund in 2004 is going to take in
about $10 billion. That is at least $2 billion short of what people
thought it would take in. The budget is calling for about $14 bil-
lion.
I do not believe the answer to the cost growth problem is to in-
crease aviation fees, taxes, or other charges, regardless of what you
call them. Passengers already pay a significant amount. Nearly 26
percent of a $100 nonstop ticket will go to taxes and fees, on a $200
single connection round-trip ticket, about $51. Just like airlines
have had to rethink the basics of their business because they are
financially stressed, FAA must also reexamine how it does busi-
ness.
The reality of personnel reform that we see has been soaring
workforce costs and significantly higher salaries. There is no doubt
that labor-management relations with the controllers have im-
proved, but FAAs operations budget has increased by nearly 65
percent, or $3 billion.
The average base salary for a fully certified controller has risen
to over $106,000, a 47 percent increase over the 1998 average of
$72,000. Salaries for the lowest-paid controllers are today about
$64,000. The lowest-paid group represents about 1 percent of the
controller workforce.
When premium pays like overtime and Sunday pay are consid-
ered, total salaries are substantially higher. The 10 highest-paid
controllers in 2002 earned between $192,000 and $214,000. In fact,
15
over 1,000 controllers earned over $150,000 in 2002, compared to

only 65 of them in 2000.
As a performance-based organization, you would also expect to
see pay and performance linked together, but frequently, that is
not the case. In fact, only about 36 percent of the FAA employees
receive increases based on their individual performance, the re-
mainder receive largely automatic increases.
In our work, we have also found that there are somewhere be-
tween 1,000 and 1,500 sidebar agreements, or memoranda of un-
derstanding that FAA managers have entered into, some commit-
ting taxpayer funds not in writing, but sometimes with a shake of
the hand. Many of these serve legitimate purposes, but we found
some that have large cost implications and they are over and above
the controller base pay.
Examples: One MOU provides controllers with an additional
cost-of-living adjustment. At 111 locations, controllers receive be-
tween 1 and 10 percent in incentive pay which is in addition to the
Government-wide locality pay. The total cost in 2002, $27 million.
We have also seen MOUs that may set a very costly precedent
for giving incentives to controllers for getting trained on and ac-
cepting new systems.
One MOU for a new air traffic control free flight tool gave each
controller an incentive $500 cash award and a 24-hour time-off
award while the system was being fielded. At six facilities alone,
that resulted in the FAA incurring approximately over $1 million
in individual cash awards, 62,500 hours in time off.
At Philadelphia, there was a verbal agreement that gave each
employee $1,000 and 3 days off in connection with the deployment
of the new STARS system. Extend that practice Nation-wide, and
you will, the budget will go through the roof.
Another MOU we reviewed allows controllers transferring to
larger facilities to begin earning the higher salaries associated with
their new positions substantially in advance of their transfer. At
one location, controllers received the increase 1 year in advance of
the transfer, going from an annual salary of $54,000 to $99,000.
During that time, they remained in their old location controlling
the same air space and performing the same duties.
So management of these MOUs has to become a lot tighter. We
found the controls over that process are virtually nonexistent. No
one knows the exact number or nature of these agreements, there
is broad authority among managers to negotiate MOUs and commit
the agency; no standard guidance for negotiating, implementing, or
signing MOUs; and no requirement for estimating potential cost
impacts. Administrator Blakey and I are working together on this
issue, and she is, I am certain, committed to bringing it under con-
trol.
I would like to turn to acquisition reform. Here, results have
been mixed, in our view. Contracts are awarded more expedi-
tiously, and a number of systems have come in on time. But the
bottom line is that significant schedule slips, schedule growth, and
substantial cost growth are all too common.
A point of reference: five major projects we tracked have experi-
enced cost growth of over $3 billion. That equates to the equivalent
of a full years budget for air traffic control modernization.
16
As for FAAs cost accounting system, it was to be completed by

1998 at a cost of $12 million. However, after over 6 years of devel-
opment and a price tag of over $38 million, the cost accounting sys-
tem is still not complete. Perhaps later this year, according to the
latest schedule. It seems elementary to me that for an organization
that is going to be performance-based, it must know where its costs
are. Given projections of controller retirements, it would also help
greatly in knowing how many controllers we need, and where we
need them.
With a budget of $14 billion, FAA cannot credibly claim to be a
performance-based organization until it has a full cost-accounting
system and uses it.
Regarding the 2000 FAA reauthorization reforms, the position of
chief operating officer has not been filled, and I am not persuaded
that the ATC subcommittee that Congress created can realistically
be expected to discharge the broad range of responsibilities it was
given. They are vastapproving the FAA budget, the cost account-
ing system, FAAs modernization plans, the administrators per-
sonnel selections, FAA strategic plan, and personnel bonuses. This
is an area I think we may need to rethink.
I do understand the subcommittee is currently working to de-
velop performance metrics, and that is a good step. One set of
metrics I hope they include are metrics on cost control, like any
business would have.
I would like to turn to the other three issues facing the com-
mittee in FAAs reauthorization. The first is capacity. No one wants
to relive the summer of 2000. I think DOT, FAA, and the aviation
community are moving smartly to prevent that from happening
through a combination of runways, new technologies, better use of
air space, and greater use of nonhub airports. If we wait to fix this
capacity problem until passenger demand returns, it is going to be
too late. It will be trying to change a tire on a moving car. So even
though the demand is not there right now, and the gridlock is not
there, now is the time, as Administrator Blakey says, to keep the
pressure on.
The second is aviation security, and funding it. We talked about
this last week. The number one issue I see are these truck-size ex-
plosive detection systems. Right now, at most airports, they are in
the lobby, but that is not the end-state solution. They are going to
have to be put at the big airports, in the baggage systems. The
price tag for that isI have seen estimates as high as $5 billion
but, I put it for the time being at about $3 billion. This is an al-
most immediate issue the airports are facing, and nobody knows
how it is going to be paid for.
I would urge caution before tapping the AIP, the Airport Im-
provement Program to pay for that. Historically, FAA has spent
about a little over $50 million a year on security. In 2002, that
jumped to a half a billion. That is not sustainable if we are also
going to deal with capacity and safety.
And finally, on safety, I think Administrator Blakeys statement
speaks eloquently and very clearly to this. It is amazing, until the
recent Air Midwest crash in Charlotte, there had not been a fatal
accident, a commercial aviation accident in the United States in 14
months. I would add that, while progress has been made this past
17
year in aviation safety, the risk of aviation accidents due to oper-

ational errors and runway incursions still needs work. Progress has
been made there. They have declined, but they remain much too
high.
For a frame of reference: Once every 10 days, a collision on the
ground or in the air is very narrowly averted in this country.
The administrator pointed out also, they have increased surveil-
lance at financially distressed carriers. I see the need for that con-
tinuing for sometime. We plan audit work to stay on top of it. A
word of caution here. We have seen some shifts in who does the
maintenance on airlines, some shifts to outsourcing at repair sta-
tions. I would urge FAA to make sure that in their stepped-up
oversight of the industry, that they also step up oversight of these
outside repair stations that are performing an increased amount of
maintenance.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Mead follows:]
PREPARED STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR GENERAL,
DEPARTMENT OF TRANSPORTATION
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to testify on reauthorization of the Federal Aviation
Administration (FAA). We look forward to working with Administrator Blakey, who
I believe will be a fine Administrator, especially with the safety background she
brings from the National Transportation Safety Board. Also, like former Adminis-
trator Garvey, she has a 5-year term, a reform established by the Congress to bring
stability and continuity in leadership. Before this reform, the average tenure of an
FAA Administrator was about 18 months. Stability in FAAs leadership will be es-
sential in addressing the formidable challenges facing FAA today. Administrator
Blakey will require substantial support from the Congress and the Administration
to address them.
Reflecting on the past 5 years, stability in leadership contributed materially to
what we consider a sustained and improved focus on safety and an overall good
safety record, successfully managing the Y2K computer problem, obtaining a clean
opinion on agency-wide financial statements, bringing new Free Flight controller
tools on-line, deploying the Display System Replacement on time and within budget,
expeditiously shutting the system down safely on September 11th, improving com-
munications links with the Department of Defense since September 11th, and set-
ting in motion required actions to prevent a repeat of the summer of 2000 when
the aviation system experienced unprecedented delays, flight cancellations, and near
gridlock.
Today, there are four central issues that need to be considered in FAAs upcoming
reauthorization: (1) making FAA a performance-based organization by controlling
the costs of its operations and cost growth in major acquisitions; (2) building avia-
tion system capacity and more efficient use of airspace to prevent a repeat of the
summer of 2000; (3) striking a balance on how airport funds will be used for avia-
tion system capacity, airport safety, and security; (4) aviation safety as FAAs top
priority.
Major Improvements Are Needed to Position FAA as a Performance-Based
Organization
In 1996, FAA was given two powerful tools-personnel reform and acquisition re-
form. FAA was also directed to establish a cost accounting system so that it would
know, at the facility level, where it was spending money and for what. The expecta-
tion was that by relieving the agency from government rules and establishing a cost
accounting system, FAA would operate more like a businessthat is, services would
be provided to users cost effectively and air traffic control modernization programs
would be delivered approximately on time and within budget. In the Aviation In-
vestment and Reform Act for the 21st Century (AIR21), Congress took additional
steps to make FAA more business-like by reorganizing Air Traffic Controls manage-
ment structure and establishing a Chief Operating Officer position.
Seven years later, we do not see sufficient progress toward achieving those out-
comes. The growth in FAAs budgetfrom about $8.2 billion in Fiscal Year (FY)
18
1996 to $14 billion in FY 2004 represents an increase of $5.8 billion. About one-
third of this increase is attributable to higher authorized amounts for airport fund-
ing. However, during this period, we have seen large increases in workforce costs,
as well as cost overruns and schedule slips in major acquisitions. Continued growth
in those categories of that magnitude is unsustainable, given the fiscal situation and
multibillion-dollar declines in projected Aviation Trust Fund receipts. FAA cannot
assume that a robust stream of Trust Fund receipts or other revenue will be avail-
able to cover its cost growth. In fact, current estimates show that over the next 4
years, Trust Fund tax receipts are expected to be more than $10 billion less than
projections made in April 2001.
We do not believe the answer to cost growth at FAA lies in an increase in taxes,
fees, or other charges. Most airlines are in extreme financial distress, and pas-
sengers already pay a significant amount in taxes, fees, and chargesnearly 26
percent of a $100 non-stop ticket goes to taxes and fees; a $200 single-connection
round trip ticket includes about $51 or 26 percent in taxes and fees. Just like the
airlines have had to rethink the basics of their business, FAA also must re-examine
how it does business. FAA needs to redouble its efforts to become performance based
in deeds as well as in words. This, in our opinion, is a primary challenge facing FAA
and ought to be a major focus of the upcoming reauthorization.
To date, the most visible results of personnel reform are soaring workforce costs
and significantly higher salaries. While during this period there has been improved
labor/management relations with controllers (FAAs largest workforce), FAAs oper-
ations budget, which is mostly payroll, has increased 65 percent or $3 billion. The
average base salary for fully certified controllers has risen to over $106,000a 47
percent increase over the 1998 average of $72,000. Because of collective bargaining
agreements, only about 36 percent of FAA employees receive pay increases based
on individual performance, and the remainder of FAA employees receive largely
automatic pay increases.
We also found that there are somewhere between 1,000 and 1,500 side bar agree-
ments or Memorandums of Understanding (MOUs) that FAA managers have en-
tered into. Many serve legitimate purposes, but MOUs can add millions to personnel
costs. However, FAA management does not know the exact number or nature of
these agreements, there are no established procedures for approving MOUs, and
their cost impact on the budget has not been analyzed. We briefed Administrator
Blakey of our concerns regarding MOUs, and we are working with the Adminis-
trator and her staff to address this issue.
Acquisition reform results have been mixedcontracts are awarded more expedi-
tiously, and FAAs build a little, test a little approach has clearly avoided failures
on the scale of the multibillion-dollar Advanced Automation System acquisition. In
addition to progress with Free Flight Phase 1, FAA has deployed systems such as
the Display System Replacement (new controller displays for en route facilities) and
the initial phase of HOST (computer that receives, processes, and tracks aircraft
movement throughout domestic and en route airspace) on time and within budget.
But the bottom line is that significant schedule slips for major air traffic control ac-
quisitions and substantial cost growth are all too common. For example, the Stand-
ard Terminal Automation Replacement System (STARS) (new controller displays
and computer equipment for terminal facilities) has slipped at least 4 years, and the
Wide Area Augmentation System (WAAS) (a new satellite-based navigation system)
has slipped 5 years. Moreover, five major projects we track have experienced cost
growth of $3 billion-the equivalent to a full years budget for modernization.
As for FAAs Cost Accounting System (CAS), it was to be completed by 1998 at
a cost of $12 million. However, after over 6 years of development and a price tag
of $38 million, FAA is now planning to complete its CAS by September 2003, assum-
ing no further slippage. Additionally, we found that in two of the five lines of busi-
ness where the CAS has been implemented, problems exist such as not allocating
costs to individual facilities, which limit the systems usefulness. A CAS is essential
for setting benchmarks and measuring performance, and it would help greatly in de-
termining how many controllers we need and where we need them. This is impor-
tant given projections of controller retirements.
Regarding the 2000 FAA reauthorization reforms, these reforms established the
position of Chief Operating Officer and an Air Traffic Control (ATC) Subcommittee,
which was empowered to, among other things, approve budgets, strategic plans, and
plans for improving the safety and modernization of the ATC system. The Chief Op-
erating Officer position has never been filled, and the ATC Subcommittee has not
fulfilled its charter. The reauthorization process offers an opportunity to rethink the
powers and responsibilities of the ATC Subcommittee in terms of how it will fit
within the FAA organizational structure, what it can realistically be expected to do,
and how it will interface with the current powers and duties of the Administrator.
19
We understand the Subcommittee is currently working to develop performance
metrics. One series of metrics, in our opinion, should include cost control metrics
and the extent to which acquisitions are brought in on time and within budget.
Now, I would like to briefly discuss capacity, airport improvement funds, and safe-
ty.
Building Aviation System Capacity and More Efficient Use of Airspace to
Prevent a Repeat of the Summer of 2000
FAA needs to be strategically positioned for when demand returns through a com-
bination of new runways, better air traffic management technology, airspace rede-
sign, and greater use of non-hub airports; it would be shortsighted to do otherwise.
FAAs Operational Evolution Plan (OEP) is the general blueprint for enhancing ca-
pacity. It was a good plan, but it has been impacted by September 11th and the
financial condition of the airlines. Given the slowdown in travel, now is a good time
to determine exactly what is needed.
FAA is working to retool the OEP. FAA needs to synchronize the OEP with FAAs
budget, set priorities, and address uncertainties with respect to how quickly air-
space users will equip with new technologies. It also needs to ensure the costs asso-
ciated with multibillion-dollar modernization projects not in the OEP are considered
when establishing priorities and are integrated with OEP initiatives. It is a good
time to rethink what reasonably can be accomplished over the next 3 to 5 years.
Striking a Balance Between How Airport Funds Will Be Used to Pay for
Security and Capacity
A major issue for airports is funding the next phase of explosives detection sys-
tems (EDS) integration. Thus far, nearly all EDS equipment has been lobby-in-
stalled. The Transportation Security Administrations (TSA) planned next step (inte-
grating the EDS equipment into airport baggage systems) is by far the most costly
aspect of full implementation. The task will not be to simply move the machines
from lobbies to baggage handling facilities but will require major facility modifica-
tions. We have seen estimates that put the costs of those efforts at over $3 billion,
and this is an almost immediate issue facing the airports.
A key question is who will pay for those costs and how. While the current Airport
Improvement Program (AIP) has provided some funding in the past for aviation se-
curity, we urge caution in tapping this program until FAA has a firm handle on air-
port safety and capacity requirements. In FY 2002, airports used over $561 million
of AIP funds for security-related projects. In contrast, only about $56 million in AIP
funds were used for security in FY 2001. Continuing to use a significant portion of
AIP funds and passenger facility charges (PFCs) on security projects will have an
impact on airports abilities to fund capacity projects.
Safety As FAAs Top Priority
The U.S. air transport system is the safest in the world, and safety remains the
number one priority for FAA. Until the recent Air Midwest crash in Charlotte, there
had not been a fatal commercial aviation accident in the United States in 14
months.
Progress has been made this past year in reducing the risk of aviation accidents
due to operational errors and runway incursions, but both remain much too high.
Operational errors and runway incursions should remain an area of emphasis for
FAA because at least three serious operational errors and one serious runway incur-
sion (in which collisions on the ground were narrowly averted) occur, on average,
every 10 days.
In the current financially-strapped aviation environment, FAA must remain vigi-
lant in its oversight to sustain a high level of aviation safety. As the Administrators
testimony states, FAA has increased surveillance at financially distressed air car-
riers. FAA has recognized the need and taken steps to heighten surveillance. We
see the need for heightened surveillance continuing for some time to come and plan
audit work to stay on top of this.
Additionally, we are encouraged by the Administrators commitment to programs
such as Flight Operational Quality Assurance (FOQA). FOQA provides objective,
quantitative data on what occurs during flight rather than what is subjectively re-
ported by individuals. FAA could use these data to identify safety trends and acci-
dent precursors.
A word of caution: FAA needs to pay close attention to the level of oversight it
provides for repair stations. In the past 5 years, there has been a significant in-
crease in air carriers use of these facilities. In 1996, major air carriers spent $1.6
billion (37 percent of their total maintenance costs) for outsourced aircraft mainte-
nance. Whereas, in 2001, the major air carriers outsourced $2.9 billion (47percent
of their total maintenance costs). FAA needs to consider this shift in maintenance
20
practices when planning its safety surveillance work. We are now completing a re-
view of FAA oversight of repair stations.
Introduction
The aviation landscape has changed dramatically since FAA was last reauthor-
ized. Airlines were in much better financial shape, the Trust Fund had collected
more tax revenue than ever before, and future estimates projected even higher reve-
nues coming in. Two years ago, we were focused on alleviating aviation gridlock and
airline delays, and improving customer serviceall of these issues are now on the
back burner.
Today, reauthorizing FAA programs has to be viewed against the backdrop of the
financial health of the industry, the decline in travel, and how airlines are revamp-
ing operations. Two large network carriers have entered into bankruptcy, and others
are taking steps to avoid similar courses. Overall, domestic enplanements were
down nearly 18 percent in November 2002 compared to November 2000.
As a result of the slow economy and the decline in air travel, there has been a
significant decrease in tax revenues coming into the Trust Fund. Projected tax rev-
enue from the Aviation Trust Fund for FY 2004 has dropped from approximately
$12.6 billion estimated in April 2001 to about $10.2 billion estimated in January
2003. Current estimates show that over the next 4 years (FY 2004 through FY 2007)
Aviation Trust Fund tax revenues are expected to be about $10 billion less than pro-
jections made in April 2001.
Although revenues to pay for FAAs programs have fallen dramatically, FAAs
costs have not. FAAs budget has increased nearly $6 billion over the past 7 years-
escalating from $8.2 billion in FY 1996 to $14 billion in FY 2004. About one-third
of this increase is attributable to higher authorized amounts for airport funding.
However, during this period, we have seen large increases in workforce costs, as
well as cost overruns and schedule slips in major acquisitions.
AIR21 gives priority to FAAs Airports and Modernization accounts by requiring
that revenue from the Trust Fund be allocated to those accounts before allocating
any revenue to FAAs operating budget. For example, as shown in the following
chart, the difference between revenues and FAAs operating budget came from the
General Fund.
General Fund Contribution for FY 2003 ($ in Billions)

FY 2003
Estimated Trust Fund Contribution $10.3

Less Airport Funding ($3.4)
Less Modernization ($3.0)
Less Research and Development ($0.1)
Residual Trust Fund Revenues Available for Operations $3.8
Operations Budget $7.1
Difference (Amount from the General Fund for Operations) $3.3
211mead1.eps
21
For FY 2004, FAAs budget request of $14 billion exceeds projected Trust Fund
revenues by over $3 billion. Assuming no new taxes, this shortfall will have to be
made up either by drawing down the uncommitted balance of the Trust Fund or
tapping the General Fund.
Making FAA a Performance-Based Organization Through Controlling Costs
in Operations and Major Acquisitions
Controlling Operating Costs. Although Congress envisioned that personnel reform
would result in more cost-effective operations, this has not occurred. Since 1996,
FAAs operating costs have increased substantially. As shown in the following
graph, FAAs operations budget, which is 82 percent payroll costs, has increased
from $4.6 billion in FY 1996 to $7.6 billion in FY 2004an increase of over 65 per-
cent. Given the decline in Aviation Trust Fund revenues and the financial situation
of the airlines, a continuation of this growth can no longer be sustained.
Much of the increase in operations costs has been a result of salary increases from
collective bargaining agreements negotiated under FAAs personnel reform author-
ity. The 1998 collective bargaining agreement with the National Air Traffic Control-
lers Association (NATCA), which created a new pay system for controllers, was a
significant cost driver. Under the agreement, controllers salaries increased substan-
tially. For example,
The average base salary for fully certified controllers has now risen to over
$106,000a 47 percent increase over the 1998 average of about $72,000 (as
shown in the table below). This compares to an average salary increase for all
other FAA employees during the same period of about 32 percent, and for all
Government employees in the Washington, DC area of about 30 percent.
Average Base Salaries for FAA Employees

Average Base Salary Fully Certified Air Non-Controller FAA Employees
(Including Locality) Traffic Controllers
2003 $106,580 (after 4.9 percent $78,080

increase)
1998 $72,580 $59,200
Percentage Increase From 46.8 31.9
1998 to 2003
211mead2.eps
22
When premium pays (such as overtime and Sunday pay) are added, controllers
total salaries can be substantially higher. For example,
The 10 highest paid air traffic controllers in calendar year (CY) 2002 earned
between $192,000 and $214,000. In fact, over 1,000 controllers earned over
$150,000 in CY 2002 (approximately 6.7 percent of the controller workforce).
That number compares to only 65 controllers that earned over $150,000 in 2000
(approximately 0.4 percent of the controller workforce).
Following the NATCA agreement, other FAA workforces began organizing into
collective bargaining units including employees from the Office of Chief Counsel, Of-
fice of Financial Services, and Office of Airports. Today, FAA has 48 collective bar-
gaining units as compared to 19 collective bargaining units in 1996.
The dramatic increase in bargaining units has complicated FAAs plans for field-
ing its agency-wide compensation system (created in April 2000), because FAAs
1996 reauthorization requires that FAA negotiate compensation with each of its col-
lective bargaining units. This has also complicated FAAs plans to create a link be-
tween pay and performance. The agency-wide pay system does away with automatic
Government-wide pay increases, and instead is designed to provide variable pay in-
creases based on an individuals and the agencys overall performance. However,
several of FAAs collective bargaining agreements have provisions that allow for
higher increases than allowed under the agency-wide pay system without consid-
ering an individuals performance. For example,
This year under terms of the NATCA collective bargaining agreement, all con-
trollers received an automatic pay increase of 4.9 percent, regardless of their
individual performance. FAA provided a similar increase to all Air Traffic field
managers and supervisors.
Because of these contractual requirements, only about 36 percent of all FAA
employees receive pay increases based on performance as established in the
agency-wide pay system (FAAs core plan). The remainder of FAA employees re-
ceive largely automatic pay increases.
FAA has also been less than effective in managing its labor agreements. For ex-
ample, outside the national collective bargaining agreement with NATCA, FAA and
the union have entered into hundreds of side bar agreements or MOUs. These
agreements can cover a wide range of issues such as implementing new technology,
changes in working conditions and(as a result of personnel reform(bonuses and
awards, all of which are in addition to base pay.
We found FAAs controls over MOUs are inadequate. For example, there is:
no standard guidance for negotiating, implementing, or signing MOUs;
broad authority among managers to negotiate MOUs and commit the agency;
no requirement for including labor relations specialists in negotiations; and
no requirement for estimating potential cost impacts prior to signing the agree-
ment.
In addition, FAA has no system for tracking MOUs, but estimates there may be
between 1,000 and 1,500 MOUs agency-wide. The total cost implications associated
with these MOUs are not known. While many serve very legitimate purposes, we
found several agreements that had substantial costs. For example,
As part of the controller pay system, FAA and NATCA entered into a national
MOU providing controllers with an additional cost of living adjustment. As a
result, at 111 locations, controllers receive between 1 and 10 percent in Con-
troller Incentive Pay, which is in addition to Government-wide locality pay. In
FY 2002, the total cost for this additional pay was about $27 million.
We reviewed a number of MOUs that were not cost-effective and, in our opinion,
neither necessary nor in the best interest of the Government. For example,
One MOU we reviewed allows controllers transferring to larger consolidated fa-
cilities to begin earning the higher salaries associated with their new positions
substantially in advance of their transfer or taking on new duties. At one loca-
tion, controllers received their full salary increases 1 year in advance of their
transfer (in some cases going from an annual salary of around $54,000 to over
$99,000). During that time, they remained in their old location, controlling the
same air space, and performing the same duties.
We have briefed Administrator Blakey on our concerns regarding MOUs, and we
are working with the Administrator and her staff to address this issue.
Improving Management of Major Acquisitions. FAA spends almost $3 billion an-
nually on a wide range of new radars, satellite-based navigation systems, and com-
munication networks. Historically, FAAs modernization initiatives have experienced
23
cost increases, schedule slips, and shortfalls in performance. While progress has
been made with Free Flight Phase 1, problems persist with other major acquisitions.
In 1996, Congress exempted FAA from Federal procurement rules that the agency
said hindered its ability to modernize the air traffic control system. Now, after near-
ly 7 years, FAA has made progress in reducing the time it takes to award contracts,
but acquisition reform has had little measurable impact on bottom line results
bringing large-scale projects in on time and within budget. The following chart pro-
vides cost and schedule information on five projects largely managed since FAA was
granted acquisition reform.
Estimated Program Costs Implementation Schedule

Percent
(Dollars in Millions)
Program Cost
Growth Original Current
Original Current
WAAS $892.4 $2,922.4* 1227 19982001 2003TBD**

STARS $940.2 $1,690.2** 80 19982005 2002TBD**
ASR11 $752.9 $916.2 22 20002005 20032008
WARP $126.4 $152.7 21 19992000 20022003
OASIS $174.7 $251.0 44 19982001 20022005
*This includes the cost to acquire geostationary satellites and costs are under review.
**Costs and schedules are under review.
These five acquisitions have experienced cost growth of over $3 billion and sched-
ule slips of 3 to 5 years. Problems with cost growth, schedule slips, and performance
shortfalls have serious consequencesthey result in costly interim systems, a reduc-
tion in units procured, postponed benefits (in terms of safety and efficiency), or
crowding out other projects.
For example, STARS, which commenced operations at Philadelphia this past year,
has cost FAA more than $1 billion since 1996. Most of these funds were spent on
developing STARS, not delivering systems. When the STARS development schedule
began slipping, FAA procured an interim system, the Common Automated Radar
Terminal System (Common ARTS) for about $200 million. FAA is now operating
Common ARTS (software and processors) at approximately 140 locations.
Moreover, in FY 2002 alone, FAA reprogrammed over $40 million from other mod-
ernization efforts (data link communications, oceanic modernization, and instrument
landing systems) to pay for cost increases with STARS. As a result of these cost and
schedule problems, FAA officials have proposed scaling back the program from 182
systems for $1.69 billion to a revised estimate of 73 systems for $1.33 billion. No
final decision has been made, and FAA is currently reevaluating how many STARS
systems it can afford.
Several other modernization projects are experiencing setbacks. The Integrated
Terminal Weather System, or ITWS provides air traffic managers with a 20-
minute forecast of weather conditions near airports. FAA planned to complete de-
ployment of all 38 systems by 2004 at a cost of about $286 million, but production
costs have tripled from $360,000 to $1.1 million per system. FAA cannot execute the
program as intended and, absent additional funding, will defer adding several
planned improvements and may procure fewer systems than intended.
In addition, FAA intended to have the Local Area Augmentation System (Cat-
egory I)a new precision approach and landing systemin operation in 2004. It is
now clear that this milestone cannot be met because of additional development
work, evolving requirements, and unresolved issues regarding how the system will
be certified as safe for pilots to use. Moreover, the more demanding Category II/III
services (planned for 2005) are now a research and development effort with an un-
certain end state. This means that benefits associated with the new precision ap-
proach and landing system will be postponed.
Our work has also found that FAA has not followed sound business practices for
administering contracts. We have consistently found a lack of basic contract admin-
istration at every stage of contract management from contract award to contract
closeout. For example, we found that Government cost estimates were:
prepared by FAA engineers, then ignored;
prepared using unreliable resource and cost data;
prepared by the contractor (a direct conflict of interest); or
not prepared at all.
FAA has stated that it will take actions to address these concernsthe key now
is follow through.
24
In addition to strengthening contract oversight, FAA needs to develop metrics to
assess progress with major acquisitions, make greater use of Defense Contract Audit
Agency audits, and institute cost control mechanisms for software-intensive con-
tracts. With schedule slips and cost overruns in major acquisitions, it should be
noted that FAA is not getting as much for its $3 billion annual investment as it
originally expected.
Tracking Costs. An effective cost accounting system is fundamental to measuring
the cost of FAA activities and provides the basis for setting benchmarks and meas-
uring performance. It represents the underpinning for FAAs operation as a perform-
ance-based organization through the development of good cost information for effec-
tive decision-making. The 1996 Reauthorization Act for FAA required the agency to
develop a cost accounting system. However, after over 6 years and $38million,
FAA is now planning to complete its CAS by September 2003, assuming no further
slippage. Additionally, we found that in two of the five lines of business where the
CAS has been implemented, problems exist such as not allocating costs to individual
facilities, which limit the systems usefulness.
To have a credible cost accounting system and to effectively measure employee
productivity, FAA needs an accurate labor distribution system. Cru-x is the labor
distribution system FAA chose to track hours worked by air traffic employees (FAAs
largest workforce). However, in September 2002, FAA and NATCA entered into an
MOU that significantly reduced the systems ability to track employee productivity.
Specifically, the MOU eliminated the requirement for controllers to sign in or out,
and Cru-X was not programmed to identify or assign the time controllers spend on
collateral activities when not controlling air traffic. We brought this issue to the at-
tention of the Administrator, and she directed that appropriate internal controls be
incorporated into the Cru-X labor distribution system.
Building Aviation System Capacity and More Efficient Use of Airspace to
Prevent a Repeat of the Summer of 2000
FAA needs to be strategically positioned for when demand returns through a com-
bination of new runways, better air traffic management technology, airspace rede-
sign, and greater use of non-hub airports; it would be shortsighted to do otherwise.
FAA estimates that air traffic (measured in terms of operations) will return to its
pre-September 11th growth pattern between 2005 and 2007. FAAs OEP is the gen-
eral blueprint for increasing capacity. As currently structured, the plan includes
over 100 different initiatives (including airspace redesign initiatives, new proce-
dures, and new technology) and is expected to cost in the $11.5 to $13 billion range,
excluding the costs to build new runways, but the true cost of implementing the
plan is unknown. FAA estimates the plan will provide a 30 percent increase in ca-
pacity over the next 10 years assuming all systems are delivered on time, planned
new runways are completed, and airspace users equip with a wide range of new
technologies.
While airspace changes and new controller automated tools will enhance the flow
of air traffic, it is generally accepted that building new runways provides the largest
increases in capacity. The OEP now tracks 12 runways scheduled for completion in
the next 10 years. Four of the runway projects are expected to be completed in 2003
at Denver, Houston, Miami, and Orlando airports. However, construction on several
other airports has been delayed from 3 months to 2 years. FAA needs to continue
to closely monitor new runway projects, (see Attachment).
Progress has been made with OEP initiatives, but much uncertainty exists about
how to move forward with systems that require airlines to make investment in new
technologies. FAA and the Mitre Corporation estimate the OEP would cost airspace
users $11 billion to equip with new technologies. For example, FAA and Mitre esti-
mate the cost to equip a single aircraft with Automatic Dependent Surveillance-
Broadcast ranges from $165,000 to almost $500,000, and the cost for Controller-Pilot
Data Link Communications ranges from $30,000 to $100,000 exclusive of the cost
to take the aircraft out of revenue service.
FAA is working to retool the OEP. FAA needs to synchronize the OEP with FAAs
budget, set priorities, and address uncertainties with respect to how quickly air-
space users will equip with new technologies. It also needs to ensure the costs asso-
ciated with multibillion-dollar modernization projects not in the OEP are considered
when establishing priorities and are integrated with OEP initiatives.
It is a good time to rethink what reasonably can be accomplished over the next
3 to 5 years, and what will be needed by FAA and industry given the decline in
Trust Fund revenue and the financial condition of the airlines. According to the As-
sociate Administrator for Research and Acquisition, it is likely that the OEP will
shift from a plan that relied heavily on airspace users to equip their aircraft to one
that places greater emphasis on airspace changes and procedural changes that take
25
advantage of equipment already onboard aircraft. FAA has an opportunity to set
priorities, flesh-out benefits, adjust to a changing business model, and develop a rea-
sonable path for moving forward with the OEP before system-wide capacity prob-
lems return.
Striking a Balance Between How Airport Funds Will Pay for Capacity and
Security Initiatives
A major issue for airports is funding the next phase of EDS integration. Thus far,
nearly all EDS equipment has been lobby-installed. TSAs planned next step (inte-
grating the EDS equipment into airport baggage systems) is by far the most costly
aspect of full implementation. The task will not be to simply move the machines
from lobbies to baggage handling facilities but will require major facility modifica-
tions. We have seen estimates that put the costs of those efforts at over $3 billion,
and this is an almost immediate issue facing the airports.
A key question is who will pay for those costs and how. While the current AIP
has provided some funding in the past for aviation security, we urge caution in tap-
ping this program until we have a firm handle on airport safety and capacity re-
quirements. In FY 2002, airports used over $561 million of AIP funds for security-
related projects. In contrast only about $56 million in AIP funds were used for secu-
rity in FY 2001. Continuing to use a significant portion of AIP funds on security
projects will have an impact on airports abilities to fund capacity projects. The fol-
lowing chart shows how AIP funds were used and for what type of project in FY
2002.
AIP funds as well as passenger facility charges (PFCs) are eligible sources for
funding this work. However, according to FAA, PFCs are generally committed for
many outlying years and it would be difficult, requiring considerable coordination
among stakeholders (i.e. airports and airlines), to make adjustments for security
modifications at this point. The following chart shows how PFC funds have been
used since 1992.
211mead3.eps
26
There have also been proposals to raise the cap on PFCs; however, we urge cau-
tion before adding additional fees or taxes for air travel. Consumers already pay a
significant amount in aviation taxes and fees. For example, a $100 non-stop round
trip ticket includes approximately $26 (26 percent) in taxes and fees. Put differently,
the airlines receive approximately $74 and the government and airports get $26. A
$200 single-connection round trip ticket includes approximately $51 (26 percent) in
taxes and fees. Here the airline gets approximately $149 and the government and
airports get $51.
Aviation Safety As FAAs Top Priority
The U.S. air transport system is the safest in the world and safety remains the
number one priority for FAA. Until the recent Air Midwest crash in Charlotte, there
had not been a fatal commercial aviation accident in the United States in 14
months.
Progress has been made this past year in reducing the risk of aviation accidents
due to operational errors and runway incursions. Operational errors (when planes
come too close together in the air) and runway incursions (potential collisions on the
ground) decreased by 11 percent and 17 percent, respectively, in FY 2002. Notwith-
standing these improvements, operational errors and runway incursions should re-
main an area of emphasis for FAA because at least three serious operational errors
and one serious runway incursion (in which collisions were narrowly averted) occur,
on average, every 10 days.
In the current financially-strapped aviation environment, FAA must remain vigi-
lant in its oversight to sustain a high level of aviation safety. Currently, airlines
are restructuring and changing the way they operate. For example, carriers are
standardizing their aircraft fleet (e.g., parking older aircraft), using aircraft repair
stations to complete more of their maintenance work, and relying on internal flight
operational quality assurance programs to reduce costs and increase safety. FAA
has systems in place to closely monitor air carriers operations, such as aircraft
maintenance, once an airline has declared bankruptcy. As the Administrators testi-
mony states, FAA has increased surveillance at these carriers based on analysis of
inspectors observations and industry databases.
Additionally, we are encouraged by the Administrators commitment to programs
such as Flight Operational Quality Assurance (FOQA). FOQA provides objective,
quantitative data on what occurs during flight rather than what is subjectively re-
ported by individuals. FAA could use these data to identify safety trends and acci-
dent precursors.
A word of caution: FAA needs to pay close attention to the level of oversight it
provides for repair stations. In the past 5 years, there has been a significant in-
crease in air carriers use of these facilities. In 1996, major air carriers spent $1.6
billion (37 percent of their total maintenance costs) for outsourced aircraft mainte-
nance. Whereas, in 2001, the major air carriers outsourced $2.9 billion (47 percent
211mead4.eps
27
of their total maintenance cost). FAA needs to consider this shift in maintenance
practices when planning its safety surveillance work.
That concludes my statement Mr. Chairman. I would be pleased to address any
questions you or other Members of the Committee might have.
The CHAIRMAN. Well, thank you very much, Mr. Mead.

I guess I would like to start my questioning by noting, as you did
at the end of your statement, that it was 14 months before the Air
Midwest tragedy in Charlotte, and that is a very impressive record,
and so I think when we look at the big picture aspects of aviation
safety we can be encouraged, but I think, Mr. Mead, you raise some
very serious issues.
211mead5.eps
28
First of all, on the MOUs, Ms. Blakey, obviously you have got a
problem there. If I were you, I would appoint a little group to get
that under control, and I say that in the context of a $5.8 billion
increase in FAA funding since 1996. I do not think you are going
to see commensurate increases in funding.
As Mr. Mead points out, a large amount of those increases has
been to workforce costs. You are going to have to get the workforce
costs under control, and we recognize the strain, the efficiency, and
the incredible talent that is required to handle air traffic, especially
in major parts of the country. Everyone is aware of that, but you
are going to have to get that under control.
I hope that the debacle concerning the cost accounting system is
not symptomatic of the way you are getting things under control.
To put in a cost accounting system, there obviously has been no ac-
counting of the work that was done to put in place a cost account-
ing system. Would you agree?
Ms. BLAKEY. Well, I come at this from a little bit different per-
spective from the Inspector General, because, having served in five
different Government agencies, I will tell you the truth, there are
very few cost accounting systems out there, period. So I will say
this
The CHAIRMAN. Well, but you certainly did not contemplate a
cost from 12 million to 38 million, and still not have it done yet.
Ms. BLAKEY. We are going to get it done. I will tell you, that the
two lines of business, we have involved right now are about 75 per-
cent of the workforce. We really are covering a large waterfront
right now, and I think we have got to get it right.
One of the things I want to do is work with the Inspector Gen-
erals office to make sure that as we mesh this with the overall fi-
nancial system for the Department, and then as we begin to use
this databecause you know, cost accounting is only so good as
you are actually then are letting it drive your decisions. I think
that is really where we need a good bit of help still, so I will tell
you that it is a work in progress, but we will get it done, and cer-
tainly by 2004, which is further out than I would like, but we will
make that.
The CHAIRMAN. Thank you.
Now, Mr. Mead, let us talk about the most pressing issue here,
and that is this disparity between the funding that is necessary for
aviation security, including funding TSA, and the amount of rev-
enue, and I believe you testified last week before Senator Lott that
there was like, a $3.5 billion shortfall, is that correct?
Mr. MEAD. Yes. When the security act was passed, sir, Congress
enacted a number of fees, and you cannot tell exactly from the leg-
islative record, but I think Congress probably thought that they
were establishing fees that would cover a very substantial part of
the price tag, and we are going to end up getting about $2 billion
in fees. The rest is being made up of appropriated funds at the
present time, and the point we were discussing last week and I
highlighted in my testimony today is this explosive detection ma-
chine price tag, which, as I said, is at least $3 billion, and where
that money is going to come from.
The CHAIRMAN. Over a 1-year period?
29
Mr. MEAD. Well, actually the law said thatthe law really estab-
lished a sense of urgency. I think everybody knows about the De-
cember 31 date. I think the Department did everything possible to
get to the December 31 date, but we all know the end state on
these explosive detection machines is to have them integrated into
the baggage system, not stuck around lobbies everywhere.
In fact, if you were going to screen luggage in the lobby, you
would not have room to walk in some of these airports. So I am
concerned that, given the urgency that we all have to install these
in the baggage systems, that we come to an early resolution of how
we are going to pay for them, and that we not just go along think-
ing that the other guy is going to pay, because that is not going
to happen, and the security is important.
I have reservations, myselfI am certainly not speaking for the
administrationabout tapping that Aviation Improvement Pro-
gram fund to any consequential degree. I think it is reasonable
that there be an uptick in the amount that the AIP pay over and
above the $50 million or so that it has been paying over the years,
but I would be very, very careful about getting too deep into it.
The CHAIRMAN. This $3 billion is not in the Presidents budget,
right?
Mr. MEAD. No, the $3 billion, people have not decided yet how
they are going to pay for the integration of these machines into the
baggage systems.
Senator LOTT. Would you allow me to join in this discussion?
The CHAIRMAN. Please.
Senator LOTT. Do you have any recommendations on how we
deal with that? Really, we have two choices, or three. I think Sen-
ator McCain talked about this last week. (1) We are going to have
to scale down what we are willing to spend, or what is going to
have to be spent in these areas, or (2) we are going to have to come
up with more money, and there is a limited number of ways you
can do that, increase ticket fees, which is not going to happen. The
airlines have to, or the airports will have to eat it, which they are
already under severe pressure, both of them, or we are going to
have to take it out of the general fund. Or is there another idea?
Mr. MEAD. I have one I would like to put on the table. I would
establish a capital fund. You might call it a revolving fund of sorts,
and into that capital fund, I would dedicate moneys for the instal-
lation of these machines, and the revenue stream for that capital
fund, that is, how you would fund it, would come from multiple
sources. I would take some from AIP, a reasonable amount. I would
take some from the security fee that has already been established,
and the remainder from general funds.
The CHAIRMAN. By fees, you are saying PFCs?
Mr. MEAD. No, I was not saying PFCs. This is another thing
they established. You established a security fee. It is not called a
PFC. I think the maximum is about $10 on a round-trip flight, and
general appropriations, and I would feed that money into this cap-
ital fund. It would provide a stable funding source.
I think I would have the management of that fund comprised of
some representatives of the airport community, FAA, and probably
the Transportation Security Administration, which would be over
at DHS, but you are going to have to have a stable funding source,
30
and it is going to have to have $3 or $4 billion in it, and I think

the outlaythe $3 billion I would say is probably going to go out
over the next couple of years, if we keep the accelerator to the
floor, as we should, on integrating the explosive detection machines
into the baggage systems.
The CHAIRMAN. So this would clearly be a part of the reauthor-
ization bill the Fed is setting up, some kind of a revolving fund,
or something along the lines you are talking about?
Mr. MEAD. Clearly.
Senator LOTT. Moving these explosive detection machines into
the baggage area, is that something that is needed or required
technologically, or is it for aesthetic or convenience sake? So, they
are in the lobby. I mean, we are dealing with security here, and
it may be a little inconvenient, but is there an urgency to this?
Mr. MEAD. At smaller airports, Senator Lott, the lobby approach
will work. At your big airports, you do not have enough machines
out there right now to screen 100 percent of the baggage through
them, and the only place you can do that efficiently is by putting
them into the baggage system. That is pretty much what they have
done in Europe.
The CHAIRMAN. This brings up another question. Is there any
technology on the boards that reduce the size of these machines
and make, perhaps, us able to do this task without the present-day
technology?
Mr. MEAD. Well, some of these issues on the technology would be
more appropriately discussed in a closed session, but what we have
out there now is what we are going to have for about the next 2
or 3 years.
There is the trace technology. I do not know if you are familiar
with that. That is the much smaller machines when you go and
somebody takes a swab and they swab your bag.
The CHAIRMAN. I have had it many, many times, especially after
they have recognized me.
[Laughter.]
Senator LOTT. Did they swab you, or just the luggage?
[Laughter.]
The CHAIRMAN. After the pat-down.
Mr. MEAD. Swabbing is part of the solution, but it is extremely
labor-intensive.
Senator LOTT. You mentioned that CFO position, or chief oper-
ating position had not been filled.
Mr. MEAD. No, sir.
Senator LOTT. You did not mention something. You said that
some position
Mr. MEAD. The chief operating officer.
Senator LOTT. At FAA?
Mr. MEAD. At FAA. The Congress in AIR21, they set up a struc-
ture. They said, okay, we have the administrator, we have the dep-
uty administrator, and now we are going to have a chief operating
officer, and they gave him a higha pretty good salary, and then
they said, there will be also something called a Management Advi-
sory Committee that would advise the administrator that would be
comprised of people in the aviation industry, and then they estab-
lished something called the Air Traffic Control Subcommittee.
31
Senator LOTT. Who is they? Us?

Mr. MEAD. You. The Congress.
[Laughter.]
Senator LOTT. That is what I thought.
Mr. MEAD. With all respect, Senator.
Senator LOTT. Do we need a COO? What do the administrator
and the deputy administrator do?
Mr. MEAD. Well, I believe that is one of the outstanding issues,
sir.
The CHAIRMAN. We might consider that in the reauthorization,
whether we really need that or not.
Ms. Blakey, do you have an opinion on that?
Ms. BLAKEY. Let me suggest this. The Congress and the FAA
both have worked very hard on this concept of pulling together
both our research and acquisition activities, and all of the oper-
ations for the National Airspace System in one organization, and
the intent is very serious that it be a truly performance-based orga-
nization.
The kind of effort, business plan that needs to be developed, and
private sector skills could be brought to bear on having financial
management cost accounting, or as I say, labor distribution ac-
counting that will go into this. I think a chief operating officer
could be very valuable to us, and I will tell you that I have gone
ahead and reengaged a search firm to look for the right person,
whose driving characteristic is strong management skills, to ad-
dress those very needs that the Inspector General has been point-
ing out this morning, so I am supportive of it as it is currently con-
stituted.
Some changes in the legislation are needed. My predecessor,
Jane Garvey, in fact, testified last summer about a number of
those, and we would very much like you to consider those, but they
are, if you will, technical changes, smaller changes, not setting
aside the whole concept.
Senator LOTT. We would be interested in getting more informa-
tion about the need for it and what you think about it, and in that
connection, do you expect that we will get administration rec-
ommendations with their thoughts on the FAA reauthorization in
the next 30 days?
Ms. BLAKEY. You will certainly get our recommendations. They
are currently in interagency coordination, and I would very much
like to get them to you quickly. I know that this spring is an oppor-
tunity for our reauthorization, and we very much want to work
with you to achieve that.
Senator LOTT. I hope you would stay behind it and not let it drag
out, because if you do, it would be my hope we would go forward
with or without it, with the Chairmans permission.
Now, on the AIP issue and the security funds, there are costs
that have come out of that. Obviously, we had extraordinary times,
we took money out of that, but I am very worried about the long-
term impact on the safety and improvements that we need at air-
ports if we continue to drain that for security costs. Do you have
any comment on that, Ms. Blakey?
Ms. BLAKEY. It is certainly something, I think, to have concern
about, because last year, we did see a very dramatic increase in the
32
amount of AIP money that went for security. From the previous
year level of about $56 million, $561 million went in 2002. That is
an 800 percent increase. Now, obviously that would be extremely
difficult to sustain over time.
I think at the FAA, we are looking at these needs as being some-
thing that are, in effect, something of a bubble, the Inspector Gen-
eral indicated, a 2-year, possibly a third year out there. Certainly
we understand, in the current economic climate, that there have to
be contributions from a variety of sources to deal with this, but I
certainly would urge that the Committee look seriously at the var-
ious options on that front, because over the term there is no ques-
tion that it would impact very significantly our capacity.
Mr. MEAD. I neglected to mention something in our discussion of
the AIP. You know, the way the law works, if you are a big airport,
it is likely that you are going to get much less AIP money under
the current law, because you are allowed to charge a PFC, and it
is economically sensible to do so. Well, another issue we need to
worry about here is that for the very, very large airports, they do
not rely on the AIP as much, and so they rely on PFCs, so if we
fix the problem with the AIP, and the extent to which the draw-
down would be for security, and you control that, you still have the
PFC issue, that you do not want them necessarily looking to the
airport and saying, well, deal with this through your PFCs.
You see, PFCs never come to the Federal Government. It is com-
pletely separate, although it is certainly authorized by federal law.
Senator LOTT. Well, I know that Senator Burns wants to ask
some questions, and I see Senator Lautenberg is here. Let me just
make three points that I want to emphasize to you, Ms. Blakey. I
hope you will follow up on these MOUs. They have got to be
brought under control. I do think we have got to continue to look
at modernization. We put $30 billion for modernization in the past
two decades. Have we gotten a lot of modernization for our cost?
And I do think you need to look at this vision thing of where we
are going to be in 10 or 20 years.
And last but not least, I presume you are going to pursue the
Presidents budget request with regard to increased numbers of air
traffic controllers, just because we have got a down slope coming
in terms of air traffic controllers retiring. We have got to start get-
ting ready for their replacements.
Thank you.
The CHAIRMAN. Senator Burns.
Senator BURNS. Thank you, Mr. Chairman. I just want to remind
the Committee, I got to looking at some figures here, and the obser-
vation that the Chairman made a while ago that we cannot put an-
other tax on anything in the airline industry to raise any more
funds, and it sounds like we need some more, and then you hear
about this MOU business, and I do not know whether we need
more money or more supervision, but just to give you an idea, there
is a 7.5 percent ticket tax, there is a $3 flight segment tax, a 6.25
tax on cargo weigh bills, 4.3 cents per gallon on commercial avia-
tion fuel, 19.3 cents-per-gallon on general aviation gasoline, 21.8
cents-per-gallon on general aviation jet fuel. There is a $13.20 ar-
rival tax for international, and the same when you depart, and a
33
7.5 percent tax on second-party sales of airline award frequent

flyer miles.
I do not know where else we can go for taxes to raise any more
money, when you take a look at that, and I do not know what
I do not have a clue how much revenue that raises, but it just
sounds like an awful lot of money to me, and I just want to bring
those figures up to remind people that we do not have a revenue
problem, maybe we have an efficiency problem somewhere along
the line.
On January 24, the TSA issued a direct and final rule,
preapproved by the Transportation Security Oversight Board, that
I believe undermines the due process and the fair rulemaking proc-
ess. As issued, the TSA is in a position to be the accuser, the judge,
jury, and the court of appeals when it comes to pilot certificates.
With the issuance of this new rule, the TSA can pull an airmans,
or a pilots certificate using secret criteria determining that the air-
man is or may pose a security risk. The pilot may appeal the deci-
sion, but can be refused the opportunity to confront his accuser or
the evidence employed against him. As an agency representative
who will implement this rule, number 1, do you believe this is a
fair rulemaking process?
Ms. BLAKEY. This rulemaking process, of course, has been one
that has been worked out between the Department of Justice, and
the Department of Homeland Security, TSA largely. We are in a
position, therefore, of trying to work with the procedures them-
selves to make sure that we are as fair as is possible in imple-
menting it.
There is an appeal process. Needless to say, these cases are just
beginning to evolve in the system, and I think what we can commit
to you is to keep a very sharp oversight on this, and to therefore
look at questions that may arise that may cause us to at least dis-
cuss further with the Department of Homeland Security any policy
issues that should be addressed on this as we move forward. It is
something, as I say, that was determined largely by the security
needs of the country. We are in a difficult situation where classified
information can be very much the driver on those pilot revocations.
Senator BURNS. Well, it just seems like to me that you mentioned
three different agencies that have three different goals. Are we
fuzzing up this business of jurisdiction and who can and who can-
not do things?
Ms. BLAKEY. The authority for this came through and resides
with the Transportation Security Administration and, therefore,
the Department of Homeland Security.
Senator BURNS. You know, I am an advocate of homeland secu-
rity, but I do not thinkI just think that we have got things that
confuseI know I am, and I know the flying public and even those
people who fly airplanes and must have a license and certificates.
This looks like an almost impossible situation, if a person is wrong-
ly accused cannot face his accuser. This flies in the face of the
American judicial system. Are you going to turn into an EPA?
Ms. BLAKEY. Well, what I can commit to you is this. The FAA
has had a long history, as you know, in issuing pilot certificates
and overseeing that process, and we will certainly apply not only
34
the experience we have, but the kind of reputation that we have

established for equity over the many years to this as well.
Senator BURNS. I am very concerned about this, Ms. Blakey, and
I shall be monitoring it, because we are hearing some very trou-
bling noises now from GA pilots, and that concerns me, because GA
is awfully important in the State of Montana, and so far, we have
got people who are really hurting financially up there. You put
some people out of business. I think we ought to open up National
to general aviation again, but that is another day, another story.
But thank you very much, Mr. Chairman.
The CHAIRMAN. Senator Lautenberg.
STATEMENT OF HON. FRANK LAUTENBERG,
U.S. SENATOR FROM NEW JERSEY
Senator LAUTENBERG. Thanks very much, Mr. Chairman. I apolo-
gize for not being here to hear the administrators comments, and
Mr. Mead and I have sat across the table many times over lots of
years.
Though I sit in the freshmans section, the fact is that the white
hair, the wrinkles, and the length of service indicates that I am
here for a much longer period of time than one would judge by my
most recent election, and Mr. Mead, as usual, you are thorough, at
times bedazzling in the information that you present because of the
volume of material that has to be considered.
And Mr. Chairman, I commend you for getting the hearing start-
ed on this reauthorization process, and I ask consent to put my for-
mal statement in the record.
The CHAIRMAN. Without objection.
[The prepared statement of Senator Lautenberg follows:]
PREPARED STATEMENT OF HON. FRANK LAUTENBERG,

U.S. SENATOR FROM NEW JERSEY
Mr. Chairman, Senator Hollings, thank you for holding this first hearing on FAA
Reauthorization, focusing on aviation technology and safety. I also want to thank
Administrator Blakey and Inspector General Mead for appearing here today.
Mr. Chairman, I have worked on transportation safety for many years, from the
law I wrote to raise the drinking age to 21, to my initiatives to get oversized trucks
off the highways, to my .08 blood alcohol drunk driving law. I look forward to con-
tinuing my safety work on this Committee as we craft the FAA Reauthorization bill.
I do want to raise one particular aviation safety issue that I find very troubling
possible privatization of the air traffic control system. In the aftermath of Sep-
tember 11th, the American people demanded one thing in particular of their govern-
ment: they wanted government personnel not private contract firmsto perform
security screening of baggage at our nations airports.
That is why I was so surprised to find out that the Administration, through the
OMB A76 process, stripped air traffic control of its inherently governmental sta-
tus last year, setting the stage for privatization. To me, that makes no sense, espe-
cially after September 11th.
It is the opposite of what the public wants. I know that the official line from the
Department of Transportation is that it does not intend to privatize air traffic con-
trollers. But that contradicts the Administrations recent actions through the A76
process.
In addition, the Administration has already solicited bids to outsource the jobs of
air traffic control specialists, who maintain, repair and monitor the system. We cur-
rently have the best air traffic control system in the world. Our federal air traffic
controllers, air traffic specialist and flight service station controllers are expert pro-
fessionals who perform under pressure every day to keep our skies safe.
I believe our air traffic controllers are almost a wing of the militaryand they
play a major role in homeland security. When the Space Shuttle Columbia tragically
35
exploded in the skies over Texas, it was the air traffic controllers who directed air-
craft away from the falling debris field.
These men and women perform a critical government function, It should not be
farmed out to private contractors. Just as the American people want government
workers checking their baggage, they want government workers to protect their
safety and security while they are in the sky.
I hope the witnesses will address this issue. Thank you Mr. Chairman.
Senator LAUTENBERG. The reference I make is principally toward

what I will call the risk of privatization, the considered privatiza-
tion of many parts of the air traffic control system. It concerns me
that we just took a whole workforce, 25,000 plus people, baggage
screeners, and took them from the public sector and put them in
the Government sector, or the private sector, rather, and put them
in the Government sector and now, with the air traffic controllers,
we are talking about the possibilities of just the reverse of that,
and preparations, though subtle, are certainly there to be able to
move the force to the private side.
And to me, the air traffic control system that we have in this
country is a miracle at work. The safety record, the volume of ac-
tivity that takes place, the movements every day across this coun-
try of ours, including those aircraft that arrive from other coun-
tries, everything is looked at, and 9/11, which was a benchmark in
atrocity for America placed an enormous burden on the aviation
system, such that it had to shut down, but in those intervening
hours right after the assault took place, it took a very delicate bal-
ance of direction to the aircraft that were flying at the time. How
do you get everybody out of the sky? How do you get them out of
the way? How do you make sure that there is no further damage
likely to follow?
It was in my view, a miracle of both efficiency and strategy, and
I am one of those who admires so much of what we have done in
the FAA air traffic control system, and I am concerned, Mr. Mead,
with the increased costs that you talk about, the controllers that
were in the $200,000 range, and I would ask you this, all these
people I assume are subjects for overtime pay when they exceed
their regularly scheduled hours, so is the problem the costs, is that
where you go first, or is it the requirements that come first?
The system was in such a state of shock after 9/11, and overtime,
was it a fairly customary thing, I think, always in the FAA, be-
cause of the strict requirements, and the fact is that days often get
elongated by weather and other conditions. What would your esti-
mate be? Did you evaluate what it was that brought the compo-
nents of salary to those levels?
Mr. MEAD. Yes, and, in fact, for the 10 highest-paid that I re-
ferred to, the ones that went from 195 to 212-something, in that
neighborhood, those people averaged $66,000 per person in various
premium pays, which would be Sunday pay, overtime, controller-in-
charge pay, there is another category called holiday pay, or holiday
differential.
By far the largest category was overtime. The average per person
in the high $100,000 categories was about $43,000, so a controller
earning about $200,000 a year, you can count on that being, aver-
age, $43,000 of it being overtime.
Senator LAUTENBERG. Twenty-five percent of the pay.
36
Mr. MEAD. Yes, and the premiums overall were even more than
that, but I would hasten to add that this cost accounting system,
which sounds very auditorish, and maybe green eyeshadish,
would really help you sort through how many controllers were at
that facility at the time this overtime was being incurred, com-
paring one facility to another, that sort of thing.
Senator LAUTENBERG. Yes. It is obvious that there are compo-
nents in there that are not just strict pay increases that have come
about whimsically, just to be nice to some people. We are, after all,
reaching to get people to take on these tasks. We still have locality
pay, I think, do we not? I remember hearing some talk about the
elimination of that kind of premium.
Mr. MEAD. There is two. There is a locality pay, the general Gov-
ernment locality pay, and on top of that, controllers at about 110
facilities get a kicker of between 1 to 10 percent of salary on top
of Government locality pay.
Senator LAUTENBERG. Why did we introduce those incentives?
Mr. MEAD. Well, I think it is probably a vestige of when, you will
recall when they were back on the general schedule, the regular
Civil Service system, there were hard-to-staff facilities.
Senator LAUTENBERG. Absolutely.
Mr. MEAD. And then after the reforms where the FAA was al-
lowed to negotiate as to pay, and they got big pay increases, then
they retained the incentive pay, so that is why you havethe aver-
age salary that I quoted of about $105,000 for the fully certified
controller is exclusive of those incentive pays.
Senator LAUTENBERG. I am not defending the extravagant wages,
but I am asking that we examine exactly how we got to where we
are, because if someone is in a rural-type community out in the
West or Midwest, and is asked to move to Chicago, or New York,
or Los Angeles, the costs of living are significantly different in
many of these places, as I learned in my discussions with control-
lers, and I know a lot of them. I used to visit with them in Newark
and La Guardia and other airports as well, and found out that they
had difficult decisions to make when they were asked to move to
another place.
I used to run a good-sized company, a company that now has
40,000 employees, and I know that we, years ago, going back many
years, you could say, hey, you are going to Lexington, Alabama, it
is a small town, but it is an opportunity. They would say yes. Now
they say, well, as soon as I talk to my wife and kids, I will let you
know whether it is of interest, and we are subject to those kinds
of pressures.
One thing that strikes me is that we ask more of them, the con-
troller workforce, I think, than we are asking of the industry gen-
erally, and I am for helping keep these companies flying, but the
fact is that they are all competing for extra business, paying sub-
stantial sums in advertising and marketing, and giving premiums,
and you name it, to build the traffic. And as a consequence, the air
traffic system has to stay with it even if the airplanes are not
filled, and even if the revenues of the airlines are less than suffi-
cient, the fact of the matter is that the demands on the system per-
sist. And we did not get the safety record that we have because we
37
were inefficient. We got it because people worked very conscien-

tiously.
And we have, again, every right to look at the costs for these op-
erations no matter what the task, but I look at the FAA almost,
Mr. Chairman, as another extension of our military, a compulsory
service for our country to function, and when the controller system
is under consideration for privatization, to me it is akin, almost, to
asking whether we want to hire mercenaries to go to the front lines
if we can get them.
I do not know what you do if a company goes on strike, does not
meet its commitment to its employees, does not provide the pension
funds that it has promised, et cetera. I think we would be in a
whole different business.
And I commend each of you for the work that you have done, and
the Chairman for initiating these reviews. We have got a lot of
work to do. When I hear the questions askedand New Jersey, you
know, is the place where much of the research on security-type
equipment is done, and I was on the Pan Am 103 review com-
mittee, and we looked very, very deeply in how we can protect our-
selves against cargo-carried bombs, and we found out that a lot of
money went into research.
The size of this thing is ugly. It is not an aesthetic thing at all.
It is as inefficient as could be to have to take luggage from one
place and move it over to another and have it out of the main-
stream, and as you said so clearly, the fact of the matter is that
a lot of these airports do not have room for these truck-size pieces
of equipment, and the trace system has not proved to be as efficient
as we would like to see, and getting things smaller is a task that
we are going to have to work on, but we dare not sacrifice security
in the process.
I thank you, Mr. Chairman, for the opportunity to talk to our
witnesses, and the fact that you brought them in so early
The CHAIRMAN. Thank you very much, Senator Lautenberg.
Thank you. We will be obviously engaged in intense discussions,
and as we move forward, it would be our intention to try to report
out a bill sometime within the next couple of months if not sooner.
Recognizing the difficulties we had last time, we have a lot of work
ahead of us.
I thank the witnesses. This hearing is adjourned.
[Whereupon, at 10:50 a.m., the Committee adjourned.]
A P P E N D I X
PREPARED STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
Mr. Chairman, I would like to thank you for holding this hearing and thank the
witnesses for their testimony. Were here today to discuss the reauthorization of the
Federal Aviation Administrations (FAA) budget and its programs, a subject of crit-
ical importance given the safety and security concerns that have arisen since Sep-
tember 11, the poor financial state of the airline industry, and the overall mission
of the FAA. Although the Transportation Security Administration (TSA) has pri-
mary jurisdiction over aviation security, the FAA will remain a partner in security
and is still responsible for the overall safety of air traffic in the United States.
Apart from security concerns, there are a number of important issues confronting
the FAA that will need to be addressed during the reauthorization period. This in-
cludes the administrations plans to privatize the air traffic control system, the pro-
jected shortage of air traffic controllers and the likely increase in air traffic and run-
way congestion over the next few years, the projected shortfall in the Airport and
Airway Trust Fund (AATF), and ensuring that enough money from the Airport Im-
provement Program (AIP) is spent on improving airport facilities, reducing noise,
and addressing capacity issues.
Although it is not technically part of FAA reauthorization, I am concerned over
the impact the administrations plan to privatize part or all of the air traffic control
system may have on air traffic in the United States, and I hope it will be debated
as we proceed with drafting legislation. Last fall the President changed the designa-
tion of air traffic services from inherently government to commercially competi-
tive, thus allowing for the possible takeover of the air traffic control system by pri-
vate contractors. I cannot think of a worse idea than handing over responsibility for
the nations air traffic control system to a private company, and I am surprised that
even this administration would entertain such a notion. After September 11 we felt
it necessary to make baggage and passenger screening a federal responsibility be-
cause private screening was obviously inadequate and most people agreed that in
this age of heightened alert only professionally trained federal workers could pro-
vide our best protection against terrorism. I ask my colleagues: if we dont trust pri-
vate screeners to inspect baggage why would we trust a private entity to run our
nations air traffic control system? The United States Government has developed
and maintained the largest, safest, and most complex air traffic system in the world.
Other nations have attempted privatization with questionable results. This work
should only be performed by well trained and experienced federal workers. These
men and women perform a valuable service to their country arid their jobs should
not be contracted out to the lowest bidder. Privatizing the air traffic control system
is a bad idea and I sincerely hope the administration takes a closer look at the harm
this could cause our nation.
Although air travel is down from its pre-9/11 peak, it will recover to earlier levels.
Keeping up with capacity will be one of the biggest challenges this agency will face
in the years to come; Increasing capacity will mean more than just building new
runways and expanding existing facilities, it will mean ensuring that the FAA has
enough controllers to monitor the nations air traffic. As such, the projected shortage
of controllers over the next three to five years is alarming. It is estimated that by
2010 the FAA will need an additional 2,000 controllers. Considering that the rate
of controller attrition is expected to increase by 150 percent over the next ten years,
the importance of hiring a new generation of controllers cannot be underscored
enough. Failure to address this problem will lead to longer delays and overworked
employees. It is imperative that the FAA hire and train enough controllers to meet
the inevitable demands on air and runway space. Without enough air traffic control-
lers to guide planes, runway construction is a moot point. I look forward to hearing
the FAAs plans to make up for this shortfall.
Another important issue during reauthorization will be the continued viability of
the Airport Improvement Program. Since passage of the Aviation and Transpor-
(39)
40
tation Security Act a significant percentage of AIP money has gone towards security
related projects instead of more traditional uses such as noise reduction, capacity
enhancement, and facility improvements. Although this was certainly warranted
given post-September 11th security concerns, I believe that we should consider al-
ternative means to fund security initiatives if this imbalance continues. Installing
EDS and ETS devices in every major American airport alone will cost between $3
and $6 billion. Given that the administrations FY 2004 request for the AIP is $3.4
billion, the same amount expended in FY 2002, and that the AIP is receives its
funding from the AATF, it may be necessary to devise alternative funding mecha-
nisms solely for security projects.
Mr. Chairman these are the issues which concern me as we consider the reauthor-
ization of this importance federal agency. I look forward to working with my col-
leagues during the reauthorization period and passing a bill which best serves the
interests of the American public. Thank you.
RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

MARION C. BLAKEY
Question 1. There are currently 219 airports participating in the FAA Contract
Tower Program, which continues to enjoy bipartisan support from Congress as a
cost-effective way to improve air traffic safety at smaller airports. This public/pri-
vate sector partnership also receives consistently high marks from the DOT Inspec-
tor General, National Transportation Safety Board, airports and aviation users. The
FAA late last year sent the District Court for the Northern District of Ohio a re-
vised study on the contract tower program that was ordered by the Court as part
of a federal lawsuit filed by the controllers union in 1994 to overturn the program.
(a) Can you provide the Committee with a status report on this lawsuit?
Answer. After FAA informed the court that it had completed its review under
0MB Circular A76, and determined that the agency should continue to acquire air
traffic control services for low level activity towers through the Federal Contract
Tower Program, NATCA filed a motion to amend its 1998 complaint to challenge
this determination. The court granted NATCAs motion. The Government, in a sin-
gle motion, moved for summary judgment or alternatively moved to dismiss the
Amended Complaint. The basis for this motion was that the agency had complied
with the Circular, and that all issues had been resolved. NATCA objected, claiming
it could not respond to the motion without discovery. The court ruled that NATCA
was entitled to discovery and on June 9, 2003, FAA responded to the discovery re-
quest. NATCA will have until the end of July to respond to the Governments mo-
tion.
(b) Also, given the success of the contract tower program for smaller communities,
what are your plans to ensure the future viability of the regular and the cost-shar-
ing program, particularly as it relates to funding?
Answer. The FAA will continue to budget for any increases in the current Federal
Contract Tower Program, for new starts in the program, and to work with commu-
nities on the cost-sharing program.
Question 2. The FAA has made a concerted effort in recent years to streamline
the review and approval process for key capacity-related projects.
(a) What is the status of those efforts?
Answer. FAA issued a Report to Congress in May 2001 reporting on federal envi-
ronmental requirements related to the planning and approval of airport improve-
ment projects together with recommendations for streamlining the environmental
review process associated with those types of projects. Six initiatives for stream-
lining were identified and implemented, as outlined below.
1. FAA established EIS Teams for preparing EISs for major runway projects at
large hub primary airports. Since the Report to Congress in 2001, FAA Teams
have been working on the EISs for eight major runway projects (Atlanta, Bos-
ton, Chicago-OHare, Chicago South Suburban Airport (SSA), Cincinnati, Los
Angeles, Philadelphia, and San Francisco). EISs have been completed for four
of the projects (Atlanta, Boston, SSA-Tier I, and Cincinnati) with the other four
in various stages of EIS preparation.
2. FAA has reallocated staff to provide for five more environmental specialist
positions in the Office of Airports. With the passage of the FY 2003 Department
of Transportation and related Agencies Appropriations Act, funding has been
provided for hiring 18 more Airports environmental specialists and 13 environ-
mental attorneys. These added personnel will specifically conduct and expedite
the environmental analysis and review of airport and aviation development so
41
as maximize the capacity benefits to the National Aviation System. FAA is un-
derway with plans to hire qualified personnel to fill these positions at various
locations around the country.
3. FAA continues to maximize the use of consultant resources to perform more
EIS tasks that can be delegated by the FAA.
4. FAA is working with the Council on Environmental Quality (CEQ) to expand
FAA list of categorical exclusions will be published in revisions to FAA environ-
mental orders. Initiatives are being explored to provide for shorten and stream-
lined EISs, as well as Environmental Assessments, that will also involve CEQ
and EPA.
5. FAA continues to engage other Federal agencies at the beginning and during
preparation of EISs about their environmental reviews and permit requirements
to avoid unnecessary delays. Also, the FAA, and the National Association of
State Aviation Officials, has undertaken a joint review of federal and state envi-
ronmental processes and coordination. As a result we have determined opportu-
nities for improving ways in which federal and individual state requirements
can be more effectively and efficiently combined and coordinated. FAA reviews
and updates the status of efforts on the latter initiative twice a year.
6. FAA has developed, published (on FAAs web site) and updates (at least twice
a year) a compendium of best practices for EIS preparation and management.
The compendium of best practices addresses practices that are the responsi-
bility of the airport proprietor, the EIS consultant, as well as those of the FAA.
(b) How have they affected the time it takes to review key projects?
Answer. The 2001 Report to Congress noted the average time for completion of
an EIS (from start of the EIS until EIS approval) was 3 years. The average time
to issue an agency Record of Decision (ROD) was 3 months. Of the four runway
EISs completed since issuance of the 2001 Report to Congress, and implementation
of FAA streamlining initiatives, the Atlanta EIS took 2 years and 5 months to com-
plete. The Tier I EIS for the SSA took 1-year and 10 months and the Cincinnati
EIS took 3 years and 2 months to complete. For the Atlanta EIS, that is 7 months
less than the 3-year average; for the SSA EIS, 12 months less than the average;
and for the Cincinnati EIS, just 2 months more than the average. RODs for Atlanta,
SSA, and Cincinnati were prepared and issued in 112, 2, and 3 months respectively.
The Boston project was unique and controversial and, therefore, the EIS process
was long (almost 7 years). Adding to the process was an 18-month delay between
1996 and 1998 because of a change in Massport leadership and priorities, and ex-
traordinary steps taken to engage community groups and the public in the process.
The Boston EIS was not an average new runway EIS project in any sense of the
word. In the ongoing EIS projects, FAA streamlining initiatives are being utilized
to ensure that environmental process times are minimized to the maximum extent
possible, and hiring more environmental staff will greatly aid the effort.
(c) Do you anticipate further administrative improvements in this area?
Answer. FAA hopes that further agency, as well as congressional actions, will lead
to administrative improvements in streamlining the environmental process for
major runway projects around the country. Besides the initiatives proposed as part
of the Administrations proposal for Aviation Reauthorization Legislation, FAA is
implementing the environmental streamlining provisions of Presidential Executive
Order (E.O.) 13274, Environmental Stewardship and Transportation Infrastructure
Project Review. Two airport EIS projects (Philadelphia and Los Angeles) have re-
cently been designated as priority projects for oversight under the E.O.
(d) Do you support efforts in Congress to make further improvements to the proc-
ess?
Answer. Yes. The Administrations bill proposes a number of streamlining provi-
sions including
designation of aviation congestion projects and aviation safety projects for high
priority coordinated, concurrent reviews;
establishment of interagency Environmental Impact Statement teams;
deference to the Secretary on project purpose and need;
deference to the FAA on reasonable alternatives, aviation factors, and aviation
noise and emissions analyses;
funding of airport expansion noise mitigation from the noise set-aside without
an additional Part 150 process requirement;
elimination of the duplicative Governors air and water quality certification; and
judicial review.
42
Question 3. While service to smaller communities remains a high priority, the Ad-
ministration has proposed cuts to the Essential Air Service Program and has not
requested funding for the Small Community Air Service Development Program.
What is the Administration doing to promote air service to smaller communities?
Answer. The key issue here is responding effectively and efficiently to small com-
munities. It is important that changes be made to the Essential Air Service pro-
gram, regardless of the proposed or ultimate funding levels, to ensure that we pro-
vide the communities the maximum flexibility possible to address their air service
issues. A one size fits all approach has not proven to be very successful. Providing
communities more direct involvement and increased flexibility in meeting their indi-
vidual needs will better ensure that the federal assistance available will provide the
communities with service that will be used.
It was not possible to provide Fiscal Year 2004 funding for the Small Community
Air Service Development Pilot Program as the program is currently authorized only
through Fiscal Year 2003. However, the Administrations Flight100 proposal in-
cludes a provision for small hubs and smaller to seek federal assistance to improve
service at their communities. It differs from the current Pilot Program in that it re-
quires a contribution of 25 percent. It also eliminates the limitations on the number
of communities that can participate. The broad flexibility and the grant structure
have been retained.
Question 4. How can FAA assert that the near-term need for OEP rollout is re-
duced (i.e., lower congestion) when it is clear that overall traffic continues to in-
crease with the dramatic growth in regional and commuter operations since 9/11,
and with the attendant increases to safety risks?
Answer. FAA continues to strongly support the Operational Evolution Plan (OEP)
and recognizes the need, both short term and long term to continue our initiatives
to increase capacity. However, the impact of the events of September 11th, and the
subsequent downturn in the aviation industry has impacted the OEP schedule.
The OEP, by its very nature is collaborative and requires the participation of
FAA, airlines, airports, avionics manufacturers and engine producers. Unfortu-
nately, the stress of the industrys severe financial situation has limited the level
of participation of many of our stakeholders. Accordingly FAA has had to change
the OEP schedule to reflect this new environment. However, the objective of the
OEP has not changed. Rather, it has been adjusted to reflect this new environment
and the industrys current financial limitations. The plan still includes investments
in additional runways, though with some schedule changes, as well as the roll out
of several capacity enhancing technologies to include required navigation perform-
ance, collaborative decision making, and more efficient approaches to airspace man-
agement. The airline industry is recovering and should reach its pre-September 11th
operating levels within the next couple of years. Further, passenger levels and rev-
enue miles, for some carriers, particularly low cost, regional, and commuter airlines,
have shown substantial increases in the number of flights and passengers carried.
The OEP does address these needs and focuses additional emphasis on airspace re-
designs at key regional airports.
Question 5. I understand that FAA and NATCA have tentatively agreed to extend
the air traffic controller contract for two years. Has this agreement been finalized?
Will this extension further increase the operating costs of the agency?
Answer. The extension agreement is only tentative and subject to the union agree-
ment to renegotiate those Memorandums of Agreement (MOA) we have identified
as having significant cost and operational impact or improperly affected manage-
ment rights. The MOA renegotiation team met in June 2003 and will reconvene in
mid-July 2003 to continue working towards resolution. If all these MOAs are suc-
cessfully renegotiated, this will help contain subsequent increases in operating costs
due the contract. Under the tentative extension, the air traffic controllers will only
receive those pay increases granted to other federal employees.
Question 6. Now that you have been at the FAA almost half a year, do you have
any priorities or goals for you term?
Answer. Since my arrival at the agency, I have been working with my senior man-
agers to set strategic direction for the Federal Aviation Administration during my
term. This has been a thoughtful and data-driven process. We are very close to fin-
ishing a new draft Strategic Planour Flight Planin conjunction with our FY
2005 budget development. We will of course be asking you and your staff, industry,
other government agencies, and our employees and unions for comment before we
finalize this plan.
The new FAA Flight Plan will have four goalsIncreased Safety, Greater Capac-
ity, International Leadership, and Organizational Excellence.
43
Increased Safety
Safety is the FAAs primary responsibility. Our dedication to keeping the skies
safe is perhaps the single most important step we can take to revive the industry.
Just as aviation is a key component in the economic health of our nation, safety
is central to the publics interest, as well as to the economic health of aviation. Pas-
sengers must know they are safe. They will not fly if they do not have confidence
in the system.
While aviation accident rates are at their lowest levels ever, the FAA will not be-
come complacent; there is always room for improvement. We will continue to de-
velop technologies that will utilize our airspace in safer, more efficient, and more
environmentally-friendly ways. We will continue to work with industry to collect
data that allow us to identify risks and prevent accidents before they happen, rather
than the old fix-and-fly method of identifying a problem once an accident has al-
ready occurred. We will continue our partnerships with industry to reduce the com-
mercial accident rate, improve runway safety, and maintain the zero-accident record
of commercial space transportation. We are also making a special commitment in
Alaska, where the challenging operating environment has led to an unacceptably
high aviation accident rate. For this reason, we are targeting innovative safety solu-
tions that will reduce the number of accidents. Success in Alaska will lead to safety
improvements throughout the national airspace system.
The FAA is also committed to moving the United States from a ground-based
navigation system to one located within the aircraft itself. Through the use of on-
board technology, pilots will be able to navigate aircraft to any point in the world
using only geographical coordinates. Required Navigation Performance (RNP) is an
important step in this direction. Because of its high degree of precision, RNP allows
for more efficient use of the airspace. In addition, RNP will enable the development
of constant angle descent approaches, thereby, increasing safety. Simply put, RNP
will allow us to fly more planes, closer together, and more safely than ever before.
The FAA will continue to improve its safety oversight of air carriers, manufactur-
ers, and airport operations. We will complete the implementation of a Safety Man-
agement System for FAAs Air Traffic Services. We are also making a significant
changes in how we measure public safety with the development of a new single safe-
ty index that will take into account all air accident injuries (not only fatal injuries)
and their impact on passengers, employees, the public, the industry, and the econ-
omy. This new index will serve as a vital trend indicator that allows us to measure
the effectiveness of many of our safety initiatives.
Safety must and will remain the FAAs top priority as the aviation industry read-
justs itself to a world transformed by terrorism and economic challenges. It is the
key to confidence in the system. It is the key to the future of aviation.
Greater Capacity
The global economy, the war on terror, the war in Iraq, and Severe Acute Res-
piratory Syndrome (SARS) have all dealt major blows to U.S. air travel. Passenger
levels are down 8 percent from where they were in early 2001, and current industry
forecasts suggest that demand will not rebound until 2005 at the earliest.
It will rebound, however. So while the airlines struggle to reinvigorate their in-
dustry at this critical time, the FAA must continue to work with local governments
and airspace users to redesign a decades-old airspace that will meet the capacity
demands of the future. This redesigned airspace will have to accommodate more
traffic while easing delays; increase safety and security while addressing noise and
air quality; and smooth air travel between land and sea while disentangling it in
major metropolitan areas. More specifically, we will ease congestion over eight met-
ropolitan areas; improve overall capacity at the nations top 35 airports by 30 per-
cent; increase the number of flights by building new runways; and increase traffic
coordination and communication through new technologies. The end result will be
an airspace that is more efficient, less costly, safer, and we will accomplish this in
an environmentally friendly manner.
Capacity, like safety, is not only a priority but a necessity. Air travel cannot grow
if aviation capacity does not grow with it. Passengers will not travel if they cannot
move through the system safely, seamlessly, and efficiently. Capacity is therefore
a vital link to realizing the full power and potential of aviation.
International Leadership
The FAA has operational responsibility for almost half of the worlds air traffic.
We certify more than 70 percent of the worlds large jet aircraft. We provide direct
or indirect assistance to 129 countries around the world to help them improve their
aviation systems. The United States, represented by the FAA, is the largest contrib-
44
utor of intellectual and financial support to the International Civil Aviation Organi-
zation (ICAO), which represents 188 of the worlds civil aviation authorities.
The FAA is, therefore, inextricably engaged in an international network of part-
nerships aimed at promoting and enhancing air safety around the globe. While
growth in aviation over the last half century has taken place primarily in the
United States, growth over the next century is going to occur primarily overseas.
The FAA wants to assure that U.S. citizens are able to travel as safely and effi-
ciently abroad as at home.
To achieve this, the FAA must work effectively with its key bilateral partners as
well as with regional and multilateral aviation organizations, support the global im-
plementation of proven air traffic technologies and procedures, and effectively lever-
age the technical and financial resources available to raise the requirements and
oversight of all civil aviation authorities to a high global safety standard.
While the worldwide air accident rate has improved over the last ten years, it re-
mains consistently greater than that of the United States. The FAA is committed
to working with our international partners to bring our experience, expertise, and
new technologies to create a safer, more efficient, economical, and environmentally
friendly global airspace.
Organizational Excellence
To achieve the ambitious goals outlined in this Strategic Plan, the FAA must
itself become a world-class enterprise. This will require strong leadership, perform-
ance-based management, and improved fiscal responsibility. Consistent with the
Presidents Management Agenda (PMA), this also means the FAA must set targets,
measure performance, and be accountable for the results. The PMA is intended to
make the government citizen-centered, results-oriented, and market-based, and
consists of the following five initiatives:
Strategic management of human capital
Competitive sourcing
Improved financial performance
Expanded electronic government
Budget and performance integration
The PMA and FAAs Organizational Excellence goal both focus on government ac-
countability while providing important services in a responsible and cost effective
manner. The FAAs goal is structured to ensure that FAA employees clearly under-
stand the agencys mission and priorities, faithfully execute their duties to accom-
plish this mission, and get the most out of every tax dollar. This means the FAA
must set targets, measure performance, and hold ourselves accountable for the re-
sults.
Controlling costs is essential. Working with our employees and industry partners,
the FAA must consistently refocus investment priorities on programs and services
that perform, while ending those that are redundant or ineffective. To accomplish
this, we will establish an agency-wide cost-control program to identify where costs
can be cut and reinvested to meet the initiatives outlined in this plan. The agency
will also accelerate the development of data and analytic tools that will allow us
to make management decisions based on sound business principles.
The FAAs workforce is the key to achieving our mission. We are committed to
finding and eliminating barriers to equity and opportunity at the FAA. The range
of diversity at the agency directly relates to the strength of our organization. Fur-
thermore, we will make sure all personnel have the tools and resources they need
to address successfully the challenges we face. In turn, employee compensation and
salary increases should be performance-based, allowing the agency to control costs
and reward success.
Our commitment to meeting these initiatives will determine our policies as we
head into the future: Where to focus our resources, where to stop focusing resources,
how to best serve the flying public, how to help the industry through a critical cross-
roads, and how to help American aviation advance safety and efficiency for travelers
all over the world.
Question 7. Congress has required that the FAA have both a Management Advi-
sory Committee and an Air Traffic Subcommittee to advise the Administrator on
managing the FAA. What is your impression of the usefulness of these two panels?
Would you recommend any legislative changes to their structure or function?
Answer. I have found both the Management Advisory Council (MAC) and the Air
Traffic Services (ATS) Subcommittee to be extremely useful in different ways. The
MAC has provided me with both formal and informal advice, and provided helpful
information and perspectives for me during my initial months as Administrator.
With their industry knowledge, keen insight, and willingness to help, the MAC is
45
a valuable asset to the FAA. The ATS Subcommittee brings another valuable,
though different, perspective to the FAAs Air Traffic Service. With their expertise
in private industry, the Subcommittee has focused ATS on becoming more perform-
ance based, more customer focused, and with a greater attention to cost saving ini-
tiatives. In this time of continuing budget concerns, the knowledge the Sub-
committee members bring will benefit the FAA and the Country.
In our reauthorization legislation, we proposed changes to the MAC and Sub-
committee. The proposed changes are:
Modify the structure and membership of the ATS subcommittee of the MAC by
separating it from the MAC to be a stand-alone ATS Board.
Add the FAA Administrator as member and Chairman of the ATS Board.
Modify the authority of the ATS Board by revising its approval authority and
involvement in the air traffic organizations budget.
Modify the MAC to change the requirement of Presidential nomination for the
one remaining aviation interest position and FAA air traffic services labor posi-
tion to Secretarial nomination and no Senate confirmation.
Question 8. What is the FAA doing to enhance safety oversight over air carriers
that are in financial difficulty? Do you have any concerns about the safety of car-
riers in financial difficulty?
Answer. In addition to monitoring an air carriers regulatory compliance, FAA in-
spectors are constantly monitoring their carriers financial and labor relations cir-
cumstances so they have a complete picture of the airlines status.
When inspectors see indicators of financial trouble or when the press reports sig-
nificant financial distress, the inspectors increase their interaction with the airlines
management and adjust their surveillance plan to increase their focus on areas that
might be at risk due to financial cut backs.
Each carriers experience is different and requires that the surveillance plan be
tailored to the circumstances. As a carrier reduces its schedule, its fleet, and its em-
ployee ranks, the impacts of these reductions must be constantly evaluated and sur-
veillance plans amended. Areas of adjusted surveillance would include: training to
ensure employees who are reassigned are properly prepared for their assignments;
maintenance to ensure that discrepancies reported by pilots are properly addressed;
and other areas affected by the carriers plans.
The carriers quality assurance and quality control process are monitored to en-
sure they are being followed and that findings are being addressed. Data and
trendssuch as dispatch reliability, on time performance, and minimum equipment
list deferralsare monitored and surveillance is retargeted if the data indicates a
negative trend.
Through increased focus and continual adjustments in tailored surveillance plans,
the FAA adequately addresses airline safety concerns.
Question 9. The GAO has warned Congress about an impending wave of air traffic
controllers over the next decade. What is the FAA doing to prepare for this wave
of retirements?
Answer. Staffing standards have been revised based on recent traffic forecasts.
These standards are an important element, along with projected retirements losses,
to predicting future controller requirements and hiring needs. With the drop in
staffing requirements due to reductions in air traffic, the 302 additional positions
in the FY 2004 budget, and the FAAs hiring plans for future years, the agency is
positioned to meet all of its staffing needs.
The agency is sensitive to the additional hiring needs needed to address the surge
in retirements. The FAAs annual retirement projections have been very accurate,
and the FAA has been meeting its annual hiring goals. Over the last 6 years, the
agency has hired more than 3,000 new controllers.
Question 10. Your testimony states that the air traffic subcommittee will use eight
metrics or measures to monitor the performance of the FAAs air traffic control sys-
tem. Will these metrics be public and how will they relate to the FAAs goals that
it develops under the Government Performance and Results Act (GPRA)?
Answer. The air traffic subcommittees eight measures are, for the most part, al-
ready part of the public domain. Three of the eight metrics, Operational Errors,
Runway Incursions, and Percent of Flights On-Time, are included in DOTs Perform-
ance Plan for FY 2003 as metrics reportable under GPRA. Four of the remaining
five metrics are measures contained in the Air Traffic Services Performance Plan,
and are available in the FAAs Aviation System Performance Metrics database. Pro-
posals to develop the last metric, a financial metric, are being explored.
The metrics have been extensively briefed, and were presented to the sub-
committee in January, with status briefings in April and July. The performance
46
metrics will be a regular portion of all ATS Subcommittee meetings. The eight
measures, and supporting second level metrics, are designed to give a Chief Oper-
ations Officer a clear and continuous view of the performance of the FAA. Although
Russell G. Chew will be joining FAA as the COO this August, during the time that
FAA has not had a COO, FAA used these metrics to monitor the performance of
the air traffic control system.
RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

MARION C. BLAKEY
Question 1. Please discuss the status of FAA programs to install ASR11 or other
radar systems in areas that currently have no radar coverage. How many radar sys-
tems does FAA expect to be able to deploy over the next several years? What criteria
are used to set priorities for new radar installation?
Answer. The FAA has qualified 12-airport surveillance radar at locations that cur-
rently have no radar coverage. Installation activities have begun at four locations
and installations are scheduled to begin at four more within the next two fiscal
years. The FAA expects to deploy/commission 112 ASR11 systems through 2010.
The FAA considers actual and forecasted number of itinerant operations, aircraft
types, Instrument-Flight Rule (IFR) operations, expected delay savings, expected
coverage, coverage provided by other radar systems, existing navigation systems,
service to satellite airports, control facilities, and feeds to large terminal radar ap-
proach control facilities in its criteria to set priorities for new radar installations.
The FAA has met with the airport operators/authorities for some airports that may
not qualify for new radar, to consider alternatives to improve service.
Question 2. As you know, Congress has provided funding in each of the last three
years for the installation of Transponder Landing Systems (TLS) at a number of
small airports, including La Grande/Union County Airport in Oregon. These airports
stand to benefit significantly both economically and from a safety perspective once
these navigation aids are put in place.
(a) How is the TLS program proceeding? What kind of progress is being made to-
ward actually commissioning these systems at the specific airports the congressional
appropriators have named?
Answer. In December 2001, FAA type accepted Advanced Navigation & Posi-
tioning Corporations (ANPC) TLS, as a special (not for public use) Category I preci-
sion approach with siting and operational limitations. The limitations were nec-
essary in order to address risks associated with the systems unique technical char-
acteristics.
The completion of the TLS evaluation has taken longer than anticipated because
of a safety issue with the system that was identified in May 2002. During the execu-
tion of a TLS approach by an FAA flight inspection pilot, the TLS provided guidance
based upon the position of a nearby helicopter. The misleading guidance information
provided by the TLS was a safety hazard, because it could potentially result in con-
trolled flight into terrain. Therefore, on May 30, 2002, the FAA suspended the Type
Acceptance for TLS.
ANPC and FAA met in June 2002 to conduct problem analysis and to define the
strategy for fixing and testing the TLS. In the process of the problem analysis, other
potential safety issues were identified. The issues and their proposed resolutions
have been reviewed and a plan to test the resolutions has been developed. Testing
recommenced in late April 2003. Once testing is complete, a decision on lifting the
suspension on the TLS Type Acceptance will be made.
Given the possibility that the results of the reevaluation may require substantial
technical changes, additional installations of TLS will be delayed until after this
process is complete.
(b) Is there anything FAA can do to streamline the site evaluation process, such
as conducting the various layers of analysis in parallel rather than sequentially?
Answer. The site evaluation process includes an initial site survey and a geo-
graphic survey. Initial site surveys are conducted to ensure that the FAA under-
stands the needs of the site, and that the airport understands the requirements of
a precision approach. Following the initial site survey, FAA can advise an airport
whether it would be a suitable location for ILS (public approach) or TLS (special
use approach, not for public use). The geographic survey is then performed so that
an approach procedure can be developed for the desired landing system.
FAA has found that concurrent TLS initial site surveys and geographic surveys
would not be prudent because, during the conduct of the initial site surveys, several
47
airports chose to decline any further consideration of a potential TLS at their facil-
ity.
To accelerate the site evaluation process the FAAs contract with ANPC includes
the geographic survey, which is normally performed by National Geodetic Survey
(NGS). Because ANPC can prioritize the survey for the installation of its own prod-
uct, TLS, this approach has significantly reduced the time required in the site eval-
uation process.
(c) Is the FAA shouldering costs related to Type Certification to the same extent
as it does for other navigation aids?
Answer. ANPC submitted the TLS for a regulatory approval as an instrument
landing system but it is not an FAA required system. The FAA has never paid de-
velopment, testing, installation or other costs to any other manufacturer for a navi-
gational aid submitted for regulatory approval. The development of the TLS is the
responsibility of ANPC, as it would be for the developer of any system not required
by FAA. Issues related to type acceptance determination and associated costs are
also the responsibility of ANPC. FAA was, however, directed by Congress to procure
the systems, so we established a contract with ANPC to acquire TLS for the test
program.
Question 3. The FAA has determined that, at least initially, TLS use will be lim-
ited to commercial airline and charter air service operators. General aviation opera-
tors will be excluded, even though some general aviation pilots may well have train-
ing and equipment that enables them to operate on a par with commercial airline
and charter pilots, and even though general aviation represents the majority of po-
tential users at many of the small airports where TLS is to be installed. Nearly a
year ago, then-Administrator Garvey explained in a letter to me that as the agency
gains experience with TLS operation, it may be possible to allow for a larger pilot
population to use TLS landing capabilities. What progress has the FAA made on
this front? When will it consider expanding TLS use to some classes of general avia-
tion operators?
Answer. The FAA type accepted the TLS as a Special Use (not for public use) sys-
tem. Restrictions to the type acceptance were necessary, because technical limita-
tions that are inherent to the TLS design result in operational risks, such as the
potential for improper guidance, the potential for signal loss that would result in
missed approaches and the potential for error due to the introduction of a human-
in-the-loop.
FAAs approach to mitigating the operational risks included limiting the use of
TLS to Part 121 and Part 135 operators, because they can be held to TLS-specific
training and operations standards that we cannot legally impose on Part 91 opera-
tors. Additional restrictions to mitigate risks include requiring each aircraft using
TLS to have a pilot and a co-pilot, requiring the use of two radios, requiring a cross-
check of TLS guidance with an alternate source of guidance, and establishing cri-
teria for siting a TLS.
The FAA intends to conduct a two-year operational evaluation after the first com-
missioning to validate the siting and operational limitations and to determine what
adjustments would be appropriate. Prior to the suspension of the TLS Type Accept-
ance, general aviation applications were to be assessed on a test-case basis during
an evaluation period. However, as a result of the system safety assessment and res-
olutions, additional procedural mitigations have been introduced that make it
unfeasible to consider general aviation operators at this time.
Question 4. There appears to be some confusion amongst aviation interests in my
state about the authority and role of Designated Engineering Representatives
(DERs) in approving supporting certification data. The regulations seem to say that
DERs have approval authority, but I am told that FAA personnel at Aircraft Certifi-
cation Offices sometimes re-analyze the data from scratch nonetheless, resulting in
significant delays. What is FAA policy on this matter?
Answer. DERs assist the FAA by examining data and finding compliance on be-
half of the FAA. The FAA determines when and how DERs will be used and how
much DER activity will be reviewed as part of DER oversight and specific project
management. The FAA retains the authority to make compliance findings on the
safety-critical, complex, controversial and new technological applications and does
not delegate those aspects of design approvals. The bulk of the work completed by
designees is routine and the FAA has a high degree of confidence in their technical
ability to make the correct finding.
The amount of delegation to DERs and the amount of review of DER-approved
data depends on several factors. A project that deals with new technology or a high
level of complexity may dictate more FAA involvement in the form of direct FAA
finding or review of findings delegated to a DER. A DER who is less experienced
48
or unfamiliar to the FAA project office would also warrant less delegation and more
review. There is no minimum or maximum quantity of data review specified in FAA
policy, but DER performance evaluation depends on some review of DER data sub-
mittals.
DER approved data is sampled and reviewed by the FAA in order to identify prob-
lem areas and ensure the DER work is satisfactory. Data is not re-analyzed from
scratch, but the reviewed data must clearly substantiate the finding that the DER
made on the FAAs behalf. If the reviewed data is poorly documented or substan-
tiated, then additional data will likely be required. Re-submittal of satisfactory data
may result in project delays but such delays are rare and are usually avoided by
up-front technical exchanges between the FAA and the applicant and DER.
RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARIA CANTWELL TO

MARION C. BLAKEY
Question 1. Administrator Blakey, the Aerospace Commission states that the
transformation of the U.S. air transportation system is a national priority. Specifi-
cally, the Commission has called for rapid deployment of a new, highly automated
Air Traffic Management system that will better accommodate the increasing num-
ber and variety of aircraft in the system.
I am very interested in seeing this recommendation implemented to ensure the
economic security of our country. Can you tell me what resources and technologies
that your agency is doing that would respond to this recommendation?
Answer. The Federal Aviation Administration (FAA) is firmly committed to de-
ploying a new, highly automated air traffic management system as called for in the
Commission report. The FAA Strategic Planthe blueprint for the FAAs activities
for the next five years and beyondemphasizes that the continued development of
a modern and efficient air traffic system is absolutely essential. Two of the principal
components of the FAAs strategic plan are the continued safe operations of a grow-
ing and diverse air traffic system and the continued growth in system capacity.
These objectives, which are critical to the future of the National Airspace System,
can only be obtained by continuing to develop a modern air traffic system.
Much of the emphasis of our work in more aggressively reaching these goals is
in leveraging technologies currently in development and moving faster on those that
are ready for deployment. By this approach we feel we can more rapidly achieve the
kind of air traffic management system envisioned by the commission.
Another facet of our work is more long term and involves coordinating the aero-
nautical and automation research efforts of several different agencies in govern-
ment. As stated in the report, it is vitally important that the FAA, the National Aer-
onautics and Space Administration, the Department of Defense, the Department of
Homeland Security, the Office of Science and Technology Policy, and the Depart-
ment of Commerce develop more effective mechanisms for collaborative research.
This is critical for developing and deploying the cutting edge technologies that will
support the future development of our air traffic system. At the moment, we are
working closely with each agency to establish agreements and structures to see that
this happens.
Question 2. Administrator Blakey, the Aerospace Commission emphasized the im-
portance of federal investment in research and development to maintaining our na-
tions strength in the commercial aviation industry. I know that the FAA plays an
important role in developing a wide variety of research on a number of issues per-
taining to aircraft infrastructure, including cooperative research efforts with the
aviation industry. As the aircraft industry has begun to work increasingly with ad-
vanced materials to design faster and more efficient planes, I know that there is
increasing excitement in the industry in applying developments in advanced mate-
rials.
I am very interested in this burgeoning field. Can I assume that you would be
interested in working with industry further to develop techniques to maintain and
ensure durability of these materials in the future, along the lines of the Center of
Excellence programs currently in place for such technologies as airport technology
and computational modeling?
Answer. We are always interested in working with industry to develop new tech-
nology. Five years ago the FAA established a Center of Excellence in Airworthiness
Assurance (AACE). The Center of Excellence currently has 28 university members.
One of the Centers principal research areas is in the durability and damage toler-
ance of advanced materials. One example of how the Centers university research
organizations are working with industry is in the maintenance and repair of ad-
vanced material sandwich structures. These are used in nacelles and control sur-
49
faces on transport aircraft, as well as fuselages on commuter and general aviation
aircraft. In this project Boeing is a full partner in this research initiative, supplying
their manpower and fabrication expertise.
Question 3. Administrator Blakey, in FY 2003, TSA requested $5.3 billion for
aviation security expenses. For FY2004, the Department of Homeland Security has
requested $4.8 billion just for aviation security. This is projected against FYs 2003
and 2004 revenues from the passenger security fee of about $1.7 billion annually,
along with yearly contributions of $300 million from the airlines. This leaves a gap
of about $3 billion each year.
In FY 2002, airports used an unprecedented amount of AlP funds for security-re-
lated projects. Historically, only about 1.5 percent of AlP funds were used for secu-
rity, while in FY 2002 17 percent of AlP funds (or over $561 million) were spent
on security-related projects. I am concerned specifically, that the Administration
may propose using AlP funds, which normally are targeted towards capacity and
safety-related improvements, to pay for the necessary security upgrades at our air-
ports. However, it is evident that if we continue to use this level of AlP funds for
security needs, there will be trade-offs in other airport programs.
So my question is how will these aviation security costs be paid for? And as a
follow up, will the Administration continue to use significant AlP funds for security?
Answer. Despite record levels of AIP expenditures in FY 2002 to help airports
meet new security requirements imposed in the wake of the terrorist attacks of Sep-
tember 11, the FAA was able to fund all safety projects, including runway safety
areas and runway safety action team recommendations; letter of intent commit-
ments; noise mitigation and reduction projects, ongoing phased projects; and con-
gressional earmarks. The LOIs and phased projects represent commitment of signifi-
cant AIP resources to capacity projects. The FAA also provided substantial AIP
funding for rehabilitation projects.
Working collaboratively with TSA and the Department of Transportation, the
FAA has committed to make a comparable level of AIP funding available for secu-
rity projects in FY 2003with a significant share going toward terminal modifica-
tion and reconfiguration costs associated with in-line EDS deployment. These costs
were made eligible for AIP funding for the first time in the Aviation and Transpor-
tation Security Act. We are confident that the system can sustain this level of AIP
support for security for one more year without compromising other national objec-
tives in building and sustaining this nations system of airports.
The FAA does not anticipate that the unprecedented level of security needs will
be sustained on a continuous basis, once deployment of explosive detection systems
for check baggage is fully implemented. Therefore, we do not anticipate that this
tension will be sustained on a long-term basis. In the mean time, the FAA will con-
tinue to work closely with the Secretary of Transportation, the TSA and this Com-
mittee to assure that the appropriate balance is struck between funding for security
and other national priorities.
RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DANIEL K. INOUYE TO

MARION C. BLAKEY
Question 1. In the Presidents recent budget submission, changes were proposed
to the Essential Air Service Program. This is an important program for several com-
munities in my state. Could you please explain the proposed changes and the pos-
sible effect on the communities that currently receive service?
Answer. We are proposing a fundamental change in the way that the government
delivers transportation services to rural America. For too long, many communities
there are a few exceptionshave taken the air service for granted as an entitlement
and done little or nothing to help make the service successful. Requiring a modest
contribution should energize civic officials and business leaders at the local and
state levels to encourage use of the service. Communities will also have many more
service options available to them. Rather than the two or three round trips a day
to one hub that EAS has traditionally provided, we would work with the commu-
nities and state departments of transportation to procure charter service, single-en-
gine, single-pilot service, regionalized service, or ground transportation in cases
where that seemed to be more responsive to their needs. Moreover, as stakeholders
in their service, the communities will become key architects in designing their spe-
cific transportation package. For the most isolated communities, we would continue
to subsidize air service to the extent of 90 percent of the total subsidy required. The
remaining communities would have to contribute 25 percent of the total subsidy re-
quired.
50
In determining a communitys standing in the program, we would incorporate the
distance from small hub airports in addition to the distance to medium and large
hubs. Some EAS communities are very close to small hubs but maintain their stand-
ing in the program because the nearby airport does not meet the medium-hub
threshold.
Question 2. I am concerned that some of the communities that would be required
to pay 10 to 25 percent of the federal subsidy level would be unable to fund the
match requirement and may lose service. In Hawaii, we have a very small commu-
nity of Hansens disease patients living in a remote area with no surface transpor-
tation links. Kalaupapa is currently served by EAS and under your current proposal
would be required to provide $51,000 to continue service. Should Kalaupapa not be
able to fund the matching requirement, it could have devastating effects on the
members of the community requiring medical attention who would not have access
to our states medical providers without this air service. Would communities that
cannot raise the necessary funds become isolated from our national air transpor-
tation system, regardless of the needs of that community?
Answer. Communities that are not able to raise the necessary funds would not
automatically be cut off from the national air transportation. We would take into
account geographic isolation, with particular deference to communities that have no
access to the national transportation system other than by air, such as islands or,
in this case, Kalaupapa. We would certainly be willing to work with you on any
needs unique to Hawaii.
In the broader context of your question, we would also like to emphasize that the
funds do not need to come from the community exclusively, or even at all, but can
come from a variety of sources, both public and private. In fact, we encourage state-
wide participation by a variety of state agencies, including, of course, state depart-
ments of transportation. Communities could also look to their chambers of com-
merce for additional support.
Question 3. The Airport Improvement Program was created to maintain and de-
velop airport facilities. Prior to September 11, security projects accounted for an av-
erage of 2 percent of the total AlP grant program. Although aviation security was
transferred to the new Transportation Security Administration, in the last Fiscal
Year more than 16 percent of the AIP grants were used for security projects. De-
spite FAAs projected growth in the national air transportation system, the Adminis-
tration has proposed level funding for the AIP program. Do you plan to submit a
proposal to protect the AIP program from further use for security projects to ensure
that the needed capacity building projects are completed?
Answer. AIP has always funded security projects at airports, although before FY
2002, security projects on average made up a low percentage of AIP expenditures.
In FY 2002, in response to the unprecedented new security requirements imposed
on airports after September 11, AIP spending on security rose to unprecedented lev-
els representing almost 17 percent of AIP. The FAA anticipates comparable levels
of AlP funding for security in FY 2003, with spending being driven by the cost of
terminal modification and reconfiguration to accommodate in-line installation of ex-
plosive detection systems for checked-baggage. The Aviation and Transportation Se-
curity Act made this work AIP eligible and the transfer of aviation security respon-
sibilities to TSA did not otherwise narrow AIP eligibility for security funding.
The FAA does not at this time anticipate continuation of these unprecedented lev-
els of AlP funding for security projects beyond FY 2003, however, our reauthoriza-
tion proposal does not include any provisions to limit the availability of AIP funds
for security.
Question 4. As you know, more than $560 million in AIP was used for security-
related expenses in Fiscal Year 2002, up from only $57 million the previous year.
Last week, TSA Under Secretary James Loy testified that the TSA would like to
have one more bite at the apple in Fiscal Year 2003 to use AIP for high priority
security projects.
What effect has the use of the $560 million in AIP in FY02 had on other safety-
and capacity-related airport improvement projects?
What is your view on the use of AlP funds for even more security costs in FY03?
What affect would the use of AIP at FY02 levels have on other projects in
FY03?
Long-term, what is your view on the use of AIP funds for security-related
projects?
Answer. Despite record levels of AIP expenditures in FY 2002 to help airports
meet new security requirements imposed in the wake of the terrorist attacks of Sep-
tember 11, the FAA was able to fund all safety projects, including runway safety
51
areas and runway safety action team recommendations; letter of intent commit-
ments; noise mitigation and reduction projects, ongoing phased projects; and con-
gressional earmarks. The LOIs and phased projects represent commitment of signifi-
cant AIP resources to capacity projects. The FAA also provided substantial AIP
funding for rehabilitation projects, though there was a reduction in reconstruction
and standards projects.
Working collaboratively with TSA and the Department of Transportation, the
FAA has committed to make a comparable level of AIP funding available for secu-
rity projects in FY 2003with a significant share going toward terminal modifica-
tion and reconfiguration costs associated with in-line EDS deployment. These costs
were made eligible for AIP funding for the first time in the Aviation and Transpor-
tation Security Act. We are confident that the system can sustain this level of AIP
support for security for one more year without compromising other national objec-
tives in building and sustaining this nations system of airports.
The FAA does not anticipate that the unprecedented level of security needs will
be sustained on a continuous basis, once deployment of explosive detection systems
for check baggage is fully implemented. Therefore, we do not anticipate that this
tension will be sustained on a long-term basis. In the mean time, the FAA will con-
tinue to work closely with the Secretary of Transportation, the TSA and this Com-
mittee to assure that the appropriate balance is struck between funding for security
and other national priorities.
Question 5. The Administration in its FY 2004 budget proposes to fund AIP at
$3.4 billion for the foreseeable future. Airports have stated that capital needs top
$16 billion annually for the foreseeable future. Can we meet ongoing safety, secu-
rity, capacity and noise-abatement needs into the future with AIP funded at only
$3.4 billion?
Answer. The Administrations proposal would continue the dramatic increase in
AIP initiated by the passage of AIR21. A $3.4 billion AIP represents a 70 percent
increase in AIP from pre-AIR21 levels. We recommend shifting a greater percent-
age of those funds to those airports with the greatest financial need and highest de-
pendence on AIP funding for achieving capital requirements. We have also proposed
that a larger percentage of AIP be made available on a discretionary basis to enable
the FAA to direct these funds to safety, security and capacity projects of national
significance. We have also proposed an increase in the noise set aside. We believe
that by retaining the robust AIR21 level of AIP, in combination with these formula
changes, we can best meet airport capital needs before us.
Question 6. In its budget request, the Administration proposes a major spend
down of the Airport and Airways Trust Fund over the next several years. How
would the spend down of the Trust Fund affect capital programs like AIP?
Answer. We remain committed to using the AATF only to fund the Departments
aviation programs, but in a change from AIR21, the Administration is proposing
to increase our use of balances that have built up in the Trust Fund.
The Administrations spend down proposal does not impact capital programs.
These programs are maintained at comparable levels to those provided under AIR
21.
Under our budget and reauthorization proposals, we are projecting an uncommit-
ted balance of just over $1.1 billion at the end of FY 2007. This balance would be
down from a $4.8 billion uncommitted balance at the end of FY 2002.
FY 2004 Funding ($ in millions)

Under AIR Under FY04
FAA Account 21 formula Pres. Bud.
Facilities & Equipment 2,916 2,916

Grants-in-Aid for Airports 3,400 3,400
Research, Engineering & Development 100 100
Operations (Trust Fund) 4,511 6,000
Operations (General Fund) 3,080 1,591
Total 14,007 14,007
Question 7. The FAA has made a concerted effort in recent years to streamline
the review and approval process for key capacity-related projects.
(a) What is the status of those efforts?
52
Answer. FAA issued a Report to Congress in May 2001 reporting on federal envi-
ronmental requirements related to the planning and approval of airport improve-
ment projects together with recommendations for streamlining the environmental
review process associated with those types of projects. Six initiatives for stream-
lining were identified and implemented, as outlined below.
1. FAA established EIS Teams for preparing EISs for major runway projects at
large hub primary airports. Since the Report to Congress in 2001, FAA Teams
have been working on the EISs for eight major runway projects (Atlanta, Bos-
ton, Chicago-OHare, Chicago South Suburban Airport (SSA), Cincinnati, Los
Angeles, Philadelphia, and San Francisco). EISs have been completed for four
of the projects (Atlanta, Boston, SSA-Tier I, and Cincinnati) with the other four
in various stages of EIS preparation.
2. FAA has reallocated staff to provide for five more environmental specialist
positions in the Office of Airports. With the passage of the FY 2003 Department
of Transportation and related Agencies Appropriations Act, funding has been
provided for hiring 18 more Airports environmental specialists and 13 environ-
mental attorneys. These added personnel will specifically conduct and expedite
the environmental analysis and review of airport and aviation development so
as maximize the capacity benefits to the National Aviation System. FAA is un-
derway with plans to hire qualified personnel to fill these positions at various
locations around the country.
3. FAA continues to maximize the use of consultant resources to perform more
EIS tasks that can be delegated by the FAA.
4. FAA is working with the Council on Environmental Quality (CEQ) to expand
FAA list of categorical exclusions will be published in revisions to FAA environ-
mental orders. Initiatives are being explored to provide for shorten and stream-
lined EISs, as well as Environmental Assessments, that will also involve CEQ
and EPA.
5. FAA continues to engage other federal agencies at the beginning and during
preparation of EISs about their environmental reviews and permit requirements
to avoid unnecessary delays. Also, the FAA, and the National Association of
State Aviation Officials, has undertaken a joint review of federal and state envi-
ronmental processes and coordination. As a result we have determined opportu-
nities for improving ways in which Federal and individual State requirements
can be more effectively and efficiently combined and coordinated. FAA reviews
and updates the status of efforts on the latter initiative twice a year.
6. FAA has developed, published (on FAAs web site) and updates (at least twice
a year) a compendium of best practices for EIS preparation and management.
The compendium of best practices addresses practices that are the responsi-
bility of the airport proprietor, the ETS consultant, as well as those of the FAA.
(b) How have they affected the time it takes to review key projects?
Answer. The 2001 Report to Congress noted the average time for completion of
an EIS (from start of the EIS until EIS approval) was 3 years. The average time
to issue an agency Record of Decision (ROD) was 3 months. Of the four runway EIS
completed since issuance of the 2001 Report to Congress, and implementation of
FAA streamlining initiatives, the Atlanta EIS took 2 years and 5 months to com-
plete. The Tier I EIS for the SSA took 1 year and 10 months and the Cincinnati
EIS took 3 years and 2 months to complete. For the Atlanta EIS, that is 7 months
less than the 3-year average; for the SSA ElS, 12 months less than the average;
and for the Cincinnati EIS, just 2 months more than the average. RODs for Atlanta,
SSA, and Cincinnati were prepared and issued in 112, 2, and 3 months respectively.
The Boston project was unique and controversial and, therefore, the EIS process
was long (almost 7 years). Adding to the process was an 18-month delay between
1996 and 1998 because of a change in Massport leadership and priorities, and ex-
traordinary steps taken to engage community groups and the public in the process.
The Boston EIS was not an average new runway ElS project in any sense of the
word. In the ongoing EIS projects, FAA streamlining initiatives are being utilized
to ensure that environmental process times are minimized to the maximum extent
possible, and hiring more environmental staff will greatly aid the effort.
(c) Do you anticipate further administrative improvements in this area?
Answer. FAA hopes that further agency, as well as congressional actions, will lead
to administrative improvements in streamlining the environmental process for
major runway projects around the country. Besides the initiatives proposed as part
of the Administrations proposal for Aviation Reauthorization Legislation, FAA is
implementing the environmental streamlining provisions of Presidential Executive
Order (E.O.) 13274, Environmental Stewardship and Transportation Infrastructure
53
Project Review. Two airport EIS projects (Philadelphia and Los Angeles) have re-
cently been designated as priority projects for oversight under the E.O.
(d) Do you support efforts in Congress to make further improvements to the proc-
ess?
Answer. Yes. The Administrations bill proposes a number of streamlining provi-
sions including
designation of aviation congestion projects and aviation safety projects for high
priority coordinated, concurrent reviews;
establishment of interagency Environmental Impact Statement teams;
deference to the Secretary on project purpose and need;
deference to the FAA on reasonable alternatives, aviation factors, and aviation
noise and emissions analyses;
funding of airport expansion noise mitigation from the noise set-aside without
an additional Part 150 process requirement;
elimination of the duplicative Governors air and water quality certification; and
judicial review.
Question 8. We are told that the Administration will soon unveil its FAA reau-
thorization proposal. Can you give us a preview of some of the key elements? Will
the Administration support the continuation of guaranteed funding for FAA capital
programs?
Answer. On March 25, 2003, the Administration transmitted its reauthorization
proposal, Flight100, to Congress.
Flight100 builds on the foundation of AIR21, by continuing our investment in
safety, air traffic control modernization and operations, airport capacity improve-
ments, and environmental stewardship. The key provisions of Flight100 include an
emphasis on smaller airports and projects of national significance. Therefore, the
Administration proposes a restructuring of the formulas and set-asides to allow
more funds to be targeted to those airports and projects with the greatest depend-
ence on federal assistance. These airports are essential to the vitality of the NAS
and have limited funding options other than federal assistance. We also recommend
simplifying the grant formulas by eliminating unnecessary or outdated set-asides.
I would also like to highlight our environmental concerns, a cornerstone of Flight
100. While FAAs primary mission is to ensure a safe and efficient NAS, we also
take our environmental responsibilities quite seriously. The environmental initia-
tives in Flight-l00 will contribute to continued success of our investment in safety
and capacity projects by providing for prompt and more effective environmental re-
view of significant projects while continuing to exercise strong environmental stew-
ardship.
The Administration also proposes new initiatives to mitigate the impacts of avia-
tion emissions and noise. For example, we propose to establish voluntary programs
to reduce aviation emissions by converting airport infrastructure, airport vehicles,
and airport-owned ground-support equipment to new low emission technologies. Our
noise initiatives include using some of the AIP noise set-aside for research aimed
at reducing community exposure to aircraft noise or emissions. We also hope to in-
crease prospective homebuyers awareness of areas near airports that are exposed
to aircraft noise by requiring federal lenders to inform prospective homebuyers of
properties within airport noise contours.
Finally, Flight-100 sets forth certain structural reforms that could assist agency
efforts to transform air traffic control and its supporting functions into an effective,
performance-based Air Traffic Organization. The structural reform provisions in our
reauthorization proposal would reinforce this goal by clarifying and enhancing man-
agement reforms that Congress has already put in place for the FAA.
Although the proposal does not extend the AIR21 provision of guaranteed fund-
ing by the Airport and Airway Trust Fund, the Presidents budget does propose to
spend not only interest and receipts accrued by the Trust Fund but also to increase
our use of balances that have built up in the fund.
Question 9. While service to smaller communities remains a high priority, the Ad-
ministration has proposed cuts to the Essential Air Service Program and has not
requested funding for the Small Community Air Service Development Program.
What is the Administration doing to promote air service to smaller communities?
Answer. The key issue here is responding effectively and efficiently to small com-
munities. It is important that changes be made to the Essential Air Service pro-
gram, regardless of the proposed or ultimate funding levels, to ensure that we pro-
vide the communities the maximum flexibility possible to address their air service
issues. A one size fits all approach has not proven to be very successful. Providing
54
communities more direct involvement and increased flexibility in meeting their indi-
vidual needs will better ensure that the Federal assistance available will provide
the communities with service that will be used.
It was not possible to provide Fiscal Year 2004 funding for the Small Community
Air Service Development Pilot Program as the program is currently authorized only
through Fiscal Year 2003. However, the Administrations Flight100 proposal in-
cludes a provision for small hubs and smaller to seek Federal assistance to improve
service at their communities. It differs from the current Pilot Program in that it re-
quires a contribution of 25 percent. It also eliminates the limitations on the number
of communities that can participate. The broad flexibility and the grant structure
have been retained.
RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

HON. KENNETH M. MEAD
Question 1. Are there any MOUs that directly impact or increase the operating
costs of the agency?
Answer. Yes. In our work we found there are between 1,000 and 1,500 side bar
agreements or Memorandums of Understanding (MOUs) that are outside the na-
tional collective bargaining agreement with controllers. Many serve legitimate pur-
poses, such as providing incentives to controllers for reducing operational errors.
However, we found some MOUs that added millions of dollars to personnel costs.
For example:
One MOU we reviewed allows controllers transferring to larger consolidated fa-
cilities to begin earning the higher salaries associated with their new positions
substantially in advance of their transfer or taking on new duties. At one loca-
tion, controllers received their full salary increases 1 year in advance of their
transfer (in some cases going from an annual salary of around $54,000 to over
$99,000). During that time, they remained in their old location, controlling the
same air space, and performing the same duties.
One MOU for a new free flight tool controller software system (URET) gave
each controller a $500 cash award and a 24-hour time-off award for meeting
certain training milestones on the new system. At 6 facilities alone, this re-
sulted in FAA incurring approximately $1.3 million in individual cash awards
and 62,500 hours in time off FAA and NATCA are now negotiating for further
implementation of URET at the next 14 locations.
At Philadelphia, there was a verbal agreement that gave each employee $1,000
in cash and 3 days off in connection with deployment of the new Standard Ter-
minal Automation Replacement System (STARS). Currently, STARS is sched-
uled to be deployed to more than 170 terminal facilities, and it is unclear if FAA
will enter into similar agreements at other locations.
Question 2. What changes does the agency need to make to improve its MOU ne-
gotiating process?
Answer. FAA needs to put controls in place over its process for negotiating, ap-
proving, and implementing MOUs. For example, we found FAA has:
no standard guidance for negotiating, implementing, and signing MOUs;
broad authority among managers to negotiate MOUs and commit the agency;
no requirement for including labor relations specialists in negotiations;
no systems for tracking the extent of signed MOUs; and
no requirement for estimating potential cost impacts prior to signing the agree-
ment.
In January 2003, we briefed the FAA Administrator on our concerns regarding
FAAs process for negotiating, approving and implementing MOUs. To the agencys
credit, FAA has taken steps to address our concerns. For example, FAA has imple-
mented new procedures for MOUs, which includes limiting approval authority and
requiring that both the Human Resources and Budget divisions review proposed
MOUs before they are signed by management. FAA is also in the process of identi-
fying those MOUs that are problematic and costly arid has begun correspondence
with NATCA to reopen several agreements. These actions are clearly steps in the
right direction.
Question 3. What suggestion have you made to the FAA regarding its handling
and approving of MOUs?
55
Answer. In our January briefmg to Administrator Blakey, we recommended sev-
eral actions FAA needed to take to correct the deficiencies in the agencys process
for negotiating, implementing, and approving MOUs. For example, we recommend
that FAA establish a team of labor relations specialists to review all MOUs and
identify costly or problematic agreements that needed to be rescinded or renegoti-
ated. We also recommended that FAA develop and distribute standardized guidance
over the MOU process including designating authority for negotiating and approving
MOUs, implementing a system for tracking MOUs, requiring that cost estimates be
prepared for all proposed MOUs, and requiring that proposed MOUs be reviewed
by FAA Labor Relations.
Since we briefed the Administrator, FAA has taken actions to bring the MOU
process under control. In May 2003, FAA issued an agency order making significant
changes to FAAs policies and procedures over the MOU process. For example, the
newly adopted procedures in the order require that:
a labor management relations specialist lead national and regional negotiations;
proposed MOUs are analyzed for affordability relative to anticipated funding
levels;
MOUs contain mandatory provisions, such as specific expiration dates; and
copies of all local, regional, and national agreements be sent to the Director and
Employee Relations for inclusion in a national database.
In our opinion, the new procedures, if properly implemented, will provide FAA
with much needed controls over the MOU process.
Question 4. I know that Administrator Garvey made some recommendations with
respect to the COO and the Air Traffic Control Subcommittee. Have you reviewed
them? Do they make sense?
Answer. We have reviewed Administrator Garveys recommendations, and in gen-
eral believe that the recommendations will improve the functions of the Air Traffic
Control (ATC) Subcommittee and the COO office. Of particular benefit would be the
fact that the ATC Subcommittee would be given greater autonomy in making deci-
sions regarding Air Traffic Control, and the fact that the Administrator would be
designated as the permanent Chairman of the Subcommittee.
Question 5. What can be done to further improve the operational error rate and
reduce runway incursions?
Answer. To further improve the operational error rate, FAA must ensure that air
traffic controllers are properly trained, especially those controllers who have mul-
tiple errors or errors that pose a moderate or high safety risk. In our April 2003
report, we also recommended that FAA (1) improve its oversight of facilities and re-
gions that continue to have a high number of operational errors and (2) monitor the
Controller-in-Charge (CIC) Program on a facility basis and perform detailed anal-
yses of those facilities that show increases in operational errors while CICs on duty.
To reduce runway incursions further, FAA must continue to identify and imple-
ment technologies to aid pilots and to prevent runway incursions at high risk air-
ports. As we recommended in our Apnl 2003 report, FAA needs to move expedi-
tiously to: (1) advance low-cost technologies to high risk airports; and (2) expedite
technologies, such as in-cockpit surface moving map displays, to aid pilots in reduc-
ing runway incursions. FAA also needs to implement recommendations from its re-
cently completed technological reviews of 13 problem airports and conduct techno-
logical reviews at 4 additional airports.
Question 6. Is the Operational Evolution Plan still a valid blueprint for the FAA
to increase capacity? How much of it needs to be revisited?
Answer. FAAs Operational Evolution Plan (OEP) was a good plan because it pro-
vided focus on capacity enhancing initiatives (such as new runways, airspace
changes, and new technologies), and addressed key problem areas, such as airport
throughput. However, much has changed since the Plan was introduced; major net-
work carriers are in fmancial distress and projected Trust Fund revenues will be
much less than previously forecasted. The Plan is still valid but given the current
environment, FAA needs to set priorities and link the Plan with the agencys budg-
et. FAA also needs to address uncertainty with respect to how quickly airspace
users will equip with new technologies in the Plan (estimated at $11 billion).
FAA has efforts underway to revise the OEP but the extent of change to the Plan
in terms of cost and schedule of key elements is not yet clear. FAA and industry
officials told us that considerable benefits can be obtained through airspace changes,
new air traffic procedures, and taking advantage of systems currently onboard air-
craftall which do not require airspace users to equip with new systems. This rep-
resents an important shift in the Plan. Senior FAA officials told us that hard deci-
56
sions about funding OEP initiatives and related major acquisitions need to be made.
This is because some large-scale, billion dollar acquisitions are not in the Plan but
critical for its success. For example, En Route Automation Modernization program
(revamping hardware and software at all FAA facilities that control high altitude
traffic) is not in the Plan but needs to be considered when revising the OEP. FAA
expects to publish a revised OEP this December.
Question 7. Funding sources are clearly going to be a concern as we reauthorize.
What options should we consider to provide appropriate funding for aviation?
Answer. This Reauthorization has to be viewed against the backdrop of the de-
cline in air travel, and the significant decrease in tax revenue coming into the Trust
Fund. Current estimates show that over the next 4 years (FY 2004 through FY
2007) Aviation Trust Fund tax revenues are expected to be about $10 billion less
than projections made in April 2001.
Within that context, the options are very limited, and a key focus for FAA will
have to be containing costs in all its accounts. However, a particular emphasis must
be directed towards containing operating costs. FAAs operating budget, which is 82
percent payroll costs, has increased from $4.6 billion in FY 1996 to $7.6 billion in
FY 2004an increase of over 65 percent. Given the decline in Aviation Trust Fund
revenues and the financial situation of the airlines, a continuation of this growth
can no longer be sustained.
In terms of the Airport Improvement Program, a major issue for airports will be
funding the next phase of explosives detection systems (EDS) integration. Thus far,
nearly all EDS equipment has been lobby-installed. The Transportation Security Ad-
ministrations (TSA) planned next step (integrating the EDS equipment into airport
baggage systems) is by far the most costly aspect of full implementation. The task
will not be to simply move the machines from lobbies to baggage handling facilities,
but will require major facility modifications. We have seen estimates that put the
costs of those efforts at over $3 billion, and this is an almost immediate issue facing
the airports.
A key question is who will pay for those costs and how. In FY 2002, airports used
over $561 million in AIP funds for security-related projects. In contrast, only about
$56 million in AIP funds were used for security in FY 2001. Continuing to use a
significant portion of AIP funds and passenger facility charges (PFCs) on security
projects will have an impact on airports abilities to fund capacity projects.
One option Congress may wish to consider is establishing a set aside within the
Aviation Trust Fund designated just for airport security-related projects; the costs
of which could be absorbed by re-directing a portion of the passenger security fee
into the Trust Fund.
Question 8. Your testimony states that despite some progress made by the FAA
in improving its procurement process, cost over-runs and schedule delays are still
not uncommon in major modernization programs. What factors contribute to this
problem? Why are some programs, like Free Flight, successful while others are not?
Answer. A number of factors contribute to cost growth, schedule slips, and per-
formance shortfalls with modernization projects. These include: underestimating the
complexity of large and complex software-intensive acquisitions, unstable require-
ments, poor cost estimating, concurrent development and production efforts, unre-
solved human factor issues (for both controllers and pilots) and poor contract over-
sight. In addition, new satellite navigation systems (such as the Wide Area Aug-
mentation System) have been impacted by complex problems in certifying systems
as safe for pilots to use. It is important to note that certifying new communications,
navigation, and surveillance systems represent a new way of doing business for FAA
because both air and ground elements of new systems need to be assessed in terms
of safety.
FAAs Free Flight Phase 1 program was successful in part because it was broken
up into smaller projects of limited size and scope, and used a build a little, test
a little approach to fielding new systems. For example, new automated controller
tools, such as the Traffic Management Advisor, were deployed at a limited number
of sites Further, FAA made the use of the new tools voluntary for controllers. Also,
FAA postponed decisions about certifying Free Flight Phase 1 systems until more
experience was gained in how the technologies would actually be used on a daily
basis. In contrast, major programs such as Standard Terminal Automation Replace-
ment System and the Wide Area Augmentation System are large, technically com-
plex programs that are required to be fully certified before they are deployed. We
also note that the both the Standard Terminal Automation Replacement System and
Wide Area Augmentation System consisted of concurrent development and produc-
tion phases, which increases cost and schedule risk.
57
Question 9. Your testimony talks about the need for FAA to become a perform-
ance-based organization. What does that mean?
Answer. In 1996, FAA was given two powerful toolspersonnel reform and acqui-
sition reform. FAA was also directed to establish a cost accounting system so that
it would know, at the facility level, where it was spending money and for what. The
expectation was that by relieving the agency from Government rules and estab-
lishing a cost accounting system, FAA would become more performance based and
operate more like a business. That is, services would be provided to users cost effec-
tively and air traffic control modernization programs would be delivered approxi-
mately on time and within budget. In the Aviation Investment and Reform Act for
the 21st Century (AIR21), Congress took additional steps to make FAA more busi-
ness-like by reorganizing Air Traffic Controls management structure and estab-
lishing a Chief Operating Officer position.
Question 10. Some parts of the airline industry have recommended a tax holiday
for taxes they pay into the Aviation Trust Fund. What would be the effect of such
a holiday on the FAA s programs?
Answer. Our understanding is that the industry wants the government to suspend
taxes that are collected into the Airport and Airway Trust Fund. These taxes, which
include the passenger ticket tax, segment tax, and commercial fuel tax, pay for all
of s annual modernization and capacity-enhancing budget, and most of FAAs oper-
ating budget. If these taxes are suspended, it would significantly alter the way FAA
is funded.
For example, the Trust Fund balance is projected to be approximately $4.6 billion
by the end of FY 2003. If a tax holiday was granted at the beginning of FY 2004,
the remaining Trust Fund balance would cover only 33 percent of FAAs FY 2004
budget, with the rest being paid out of the General Fund. In addition, future FAA
budgets, which will be in excess of $14 billion, would be completely funded by the
General Fund, which is already facing significant challenges.
Question 11. Mr. Mead, in the Administrations budget, the President has pro-
posed spending down the uncommitted balance in the Airport and Airway Trust
Fund. Do you believe this is prudent? You have expressed concern about the grow-
ing general fund component of the FAA budget? Do you agree with this approach?
Answer. Given the current budgetary and economic demands currently facing the
Federal Government, spending the uncommitted balance of the Airport and Airway
Trust Fundfor aviation-related needs makes sense. However, two caveats to this ap-
proach must be considered. First, the funding mechanisms contained in the Admin-
istrations proposal are contingent upon the Trust Fund meeting revenue projec-
tions. The current Trust Fund projections were made prior to the war in Iraq and
the SARS outbreak, and there are still significant uncertainties of when air travel
will rebound. If revenue projections are not met, it will simply mean that more of
FAAs operating budget will have to be fmanced from the General Fund. Second, the
Administrations proposal is obviously only a short-term solution to FAAs funding
dilemma. Clearly, the long-term solution is to bring FAA s operating costs into line
with the tax revenues that fund it.

Senate Hearing, 108TH Congress - Federal Aviation Administration Reauthorization

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Senate Hearing, 108TH Congress - Federal Aviation Administration Reauthorization

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S. HRG.

FEDERAL AVIATION ADMINISTRATION

FEBRUARY 11, 2003

U.S. GOVERNMENT PRINTING OFFICE

For sale by the Superintendent of Documents, U.S. Government Printing Office

ONE HUNDRED EIGHTH CONGRESS

JOHN MCCAIN, Arizona, Chairman

TUESDAY, FEBRUARY 11, 2003

money. Revenues going in the Aviation Trust Fund are declining.

STATEMENT OF HON. TRENT LOTT,

This is going to be a bipartisan effort because this is something

STATEMENT OF HON. DANIEL K. INOUYE,

STATEMENT OF HON. CONRAD BURNS,

And I am kind of concerned about this rulemaking in a sense, be-

PREPARED STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR FROM MONTANA

ational data directly from the flight data recorders on an ongoing

Finally, while the FAA is often focused on making improvements

The CHAIRMAN. Thank you, Administrator Blakey.

STATEMENT OF HON. KENNETH M. MEAD, INSPECTOR

Third is striking the balance on how airport funds will be used

over 1,000 controllers earned over $150,000 in 2002, compared to

As for FAAs cost accounting system, it was to be completed by

year in aviation safety, the risk of aviation accidents due to oper-

General Fund Contribution for FY 2003 ($ in Billions)

Estimated Trust Fund Contribution $10.3

Average Base Salaries for FAA Employees

2003 $106,580 (after 4.9 percent $78,080

Estimated Program Costs Implementation Schedule

WAAS $892.4 $2,922.4* 1227 19982001 2003TBD**

The CHAIRMAN. Well, thank you very much, Mr. Mead.

and it is going to have to have $3 or $4 billion in it, and I think

Senator LOTT. Who is they? Us?

7.5 percent tax on second-party sales of airline award frequent

the experience we have, but the kind of reputation that we have

PREPARED STATEMENT OF HON. FRANK LAUTENBERG,

Senator LAUTENBERG. The reference I make is principally toward

were inefficient. We got it because people worked very conscien-

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARIA CANTWELL TO

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. DANIEL K. INOUYE TO

FY 2004 Funding ($ in millions)

Facilities & Equipment 2,916 2,916

Total 14,007 14,007

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN TO

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